Student Loan Nightmare: Help Wanted
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Got this from Anderson Cooper's Blog Spot! Great Read!
Samantha Hillstrom
CNN Production Assistant
I’m about to talk about two little words that make most people cringe. The mere mention of these words usually incites the same reaction in everyone: a) fear b) denial c) a throbbing headache and d) the desire to run away screaming and crying and begging to go to a “happy place.” Yes, I am talking about STUDENT LOANS. If you don’t have one, you know someone who does and you sympathize with them. In the midst of the credit crisis, home foreclosures and bailout turmoil, the amount of debt that graduates are facing is overwhelming.
I am 23-years-old, two years out of college and I am sitting on $115,000 of student debt. And based on my lender’s loan terms, I only have roughly 12 years to pay it off. How much does that make my monthly payment, you ask? A whopping $1,200 a month. And let’s just say my lifelong dream career in television doesn’t lend itself to that. The only option my bank is giving me is to go on “graduated repayment plan.” That means that for four years I will only be paying off the interest every month. How much is that? Well, $115,000 with interest rates between 4-8%… that’s about $600 a month and that doesn’t even touch the principal amount. People don’t pay off houses in 12 years and I am expected to pay off this student loan in an entry level position?
Some might say, “Sam, you shouldn’t have gone to a private school in New York City if you wouldn’t be able to pay it off.” Well, I made a lot of mistakes when signing up for my loans, but I was uneducated on the process and on the repayment and now I’m stuck. I share the same anxiety as the families struggling to pay their mortgages. How was I ever to expect the financial crisis that was going to happen and where can I get some help?
And why do I have such a short amount of time to pay off my loans? Because of the current financial crisis. Due to the economic downturn, my lender isn’t consolidating loans. If I were able to consolidate, my repayment time would extend to 30 years…just like a home mortgage. Now that wouldn’t necessarily solve the problem, in that I would still owe more than $500 a month with the principal and interest, but it would buy me a bit more time and stretches out the money.
Here is my question: why aren’t student loans receiving the same attention, same care and forgiveness as every other loan in America? I have to say that I am lucky to have a job right now and was especially lucky to get a job right out of college. Can you imagine what kind of pressure and stress the 2009 graduates are feeling in this time of uncertainty? Veterans of the workforce can’t find work right now. What about the recent college grads with no work experience and tens of thousands of dollars of unforgivable debt underneath them?
There is a grain of hope that will come when the Income-Based Repayment Plan, part of the College Cost Reduction and Access Act of 2007, will take effect on July 1. The program will cap off borrower’s monthly payments at 10% of their gross income for 25 years with the rest of the debt being forgiven. However, that only applies to federal loans (which is only one of my four loans).
According to the Federal Education Department, in 2008 there was nearly $131 billion of outstanding private student loans across the country. For 2009, the amount of outstanding federal student loans is $544 billion, up $42 billion from last year. Where is our bailout? Where are our options? The default rate on student loans this year is already at 6.9%. That’s a 13% increase from last year.
Recently, Rev. Jesse Jackson started a campaign called “Reduce the Rate” urging the Obama administration to reduce the interest rates of student loans to 1%….the same amount of interest the banks are getting.
Jackson’s plan proposes the following…
Reduce the interest rate on all student loans to 1%.
If banks can borrow at 1% or less, then so should our students.
Extend the grace period before loan repayment begins from 6 months to 18 months for students who graduate.
In these tough economic times, it takes a college graduate an average of 6 months to 1 year to find a job. The rules should reflect this reality.
End the penalties assessed to schools for student loan defaults.
Schools should not be held accountable for students who don’t pay back their loans.
Increase Pell Grants to cover the average yearly cost of a public
4 year institution instead of the amounts in the current stimulus package–$5,350 starting July 1 and $5,550 in 2010-2011
Source: Reducetherate.org
I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?
Some people are arguing it was the choice of the student to go to school and get loans, while others agree there should be some sort of relief for student borrowers! Fresh out of college myself I agree with the young lady who wrote the blog. Why should I have settled for attending some State school, when it's been my dream to attend the school I graduated from and I recieved a top notch education from the private school I graduated from! Thoughts....
Samantha Hillstrom
CNN Production Assistant
I’m about to talk about two little words that make most people cringe. The mere mention of these words usually incites the same reaction in everyone: a) fear b) denial c) a throbbing headache and d) the desire to run away screaming and crying and begging to go to a “happy place.” Yes, I am talking about STUDENT LOANS. If you don’t have one, you know someone who does and you sympathize with them. In the midst of the credit crisis, home foreclosures and bailout turmoil, the amount of debt that graduates are facing is overwhelming.
I am 23-years-old, two years out of college and I am sitting on $115,000 of student debt. And based on my lender’s loan terms, I only have roughly 12 years to pay it off. How much does that make my monthly payment, you ask? A whopping $1,200 a month. And let’s just say my lifelong dream career in television doesn’t lend itself to that. The only option my bank is giving me is to go on “graduated repayment plan.” That means that for four years I will only be paying off the interest every month. How much is that? Well, $115,000 with interest rates between 4-8%… that’s about $600 a month and that doesn’t even touch the principal amount. People don’t pay off houses in 12 years and I am expected to pay off this student loan in an entry level position?
Some might say, “Sam, you shouldn’t have gone to a private school in New York City if you wouldn’t be able to pay it off.” Well, I made a lot of mistakes when signing up for my loans, but I was uneducated on the process and on the repayment and now I’m stuck. I share the same anxiety as the families struggling to pay their mortgages. How was I ever to expect the financial crisis that was going to happen and where can I get some help?
And why do I have such a short amount of time to pay off my loans? Because of the current financial crisis. Due to the economic downturn, my lender isn’t consolidating loans. If I were able to consolidate, my repayment time would extend to 30 years…just like a home mortgage. Now that wouldn’t necessarily solve the problem, in that I would still owe more than $500 a month with the principal and interest, but it would buy me a bit more time and stretches out the money.
Here is my question: why aren’t student loans receiving the same attention, same care and forgiveness as every other loan in America? I have to say that I am lucky to have a job right now and was especially lucky to get a job right out of college. Can you imagine what kind of pressure and stress the 2009 graduates are feeling in this time of uncertainty? Veterans of the workforce can’t find work right now. What about the recent college grads with no work experience and tens of thousands of dollars of unforgivable debt underneath them?
There is a grain of hope that will come when the Income-Based Repayment Plan, part of the College Cost Reduction and Access Act of 2007, will take effect on July 1. The program will cap off borrower’s monthly payments at 10% of their gross income for 25 years with the rest of the debt being forgiven. However, that only applies to federal loans (which is only one of my four loans).
According to the Federal Education Department, in 2008 there was nearly $131 billion of outstanding private student loans across the country. For 2009, the amount of outstanding federal student loans is $544 billion, up $42 billion from last year. Where is our bailout? Where are our options? The default rate on student loans this year is already at 6.9%. That’s a 13% increase from last year.
Recently, Rev. Jesse Jackson started a campaign called “Reduce the Rate” urging the Obama administration to reduce the interest rates of student loans to 1%….the same amount of interest the banks are getting.
Jackson’s plan proposes the following…
Reduce the interest rate on all student loans to 1%.
If banks can borrow at 1% or less, then so should our students.
Extend the grace period before loan repayment begins from 6 months to 18 months for students who graduate.
In these tough economic times, it takes a college graduate an average of 6 months to 1 year to find a job. The rules should reflect this reality.
End the penalties assessed to schools for student loan defaults.
Schools should not be held accountable for students who don’t pay back their loans.
Increase Pell Grants to cover the average yearly cost of a public
4 year institution instead of the amounts in the current stimulus package–$5,350 starting July 1 and $5,550 in 2010-2011
Source: Reducetherate.org
I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?
Some people are arguing it was the choice of the student to go to school and get loans, while others agree there should be some sort of relief for student borrowers! Fresh out of college myself I agree with the young lady who wrote the blog. Why should I have settled for attending some State school, when it's been my dream to attend the school I graduated from and I recieved a top notch education from the private school I graduated from! Thoughts....
Replies to This Discussion
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Permalink Reply by a_BilLi on -
I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?
Bitch yes! Sorry to say it, but it's true. Hell I worked for an agency that guarantees student loans for two years and that still didn't help me none. My only saving grace is working my ass off so that I will have the ability to pay this bill. I'm glad 95% of my loans are federal though. SMH
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Permalink Reply by Siren on -
A quality education should be a right not a privilege.... and you should not have to pay for your education the rest of your life. There are many occupations that require a degree that don't pay loads of $$$ (i.e. teachers)> Our educational system is FLAWED as hell and the student loan programs suck and are unfair.... This ish blows me...
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Permalink Reply by a_BilLi on
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Siren is absolutely right. Quality education should not cost us the rest of our lives. This chick went overboard though. $115k on a journalism degree?! She could have gotten a really good education for half that. If she is that much in debt bc she wanted to go to a private school her lifelong dream career needs to be owning a TV station, not working for one. I'm just sayin...
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Permalink Reply by Siren on
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The politics hat go along with having a degree froma private prestigous college versus a public state or city college when it comes to getting work are flawed... nobody gives a crap about a journalism degree from a local City College but come with one from NYU or Columbia and people take notice. That is why the education system needs to be revamped..it is all about the brand... Damn Shame!
a_BilLi said:Siren is absolutely right. Quality education should not cost us the rest of our lives. This chick went overboard though. $115k on a journalism degree?! She could have gotten a really good education for half that. If she is that much in debt bc she wanted to go to a private school her lifelong dream career needs to be owning a TV station, not working for one. I'm just sayin...
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Permalink Reply by Devyn AKA Dominique Devereaux on -
Siren, you hit the nail on the head!
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Permalink Reply by LMS on
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There a lot of state schools that suck! Point. Blank. Period! FREE isn't eveything b/c it still comes with a price!
I'm from FLA and everyone goes to FAMU, FIU,FAU, U of FL, or FSU! I felt limited until I took a college tour! When it came to it my choices were Spelman,Clark, Hampton or Howard! All of those schools are HBCU's that are private!
I had a choice be a number at a public school or go get an education that makes me a standout! Too bad it cost me 30k a year to do so!
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Permalink Reply by Tee on -
It cost me a grip to go to SU cause I was outstate student so I can feel her pain. I think there should be a program for ppl who have loans...im not say pay them back for us but a program would be good. Im about to write Oprah and everyone else i can think of so i can get my money paid back free
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Yeah, i read his mom is Gloria Vanderbilt, the lady with the Jeans! Damn AC! But I heard he was 'How you doing?!'
wellnow said:I bet Anderson will pay it off, she got his attention. I'm sure he won't publicize that he will do it though. He has authentic, real, old money.
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Permalink Reply by Tee on
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he is how u doin but the silver fox is sexy... girl dont play...LOL
LMS said:Yeah, i read his mom is Gloria Vanderbilt, the lady with the Jeans! Damn AC! But I heard he was 'How you doing?!'
wellnow said:I bet Anderson will pay it off, she got his attention. I'm sure he won't publicize that he will do it though. He has authentic, real, old money.
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Permalink Reply by memyselfnI on -
great post
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