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The same 17-20 year olds that are claiming it is not fair that they are expected to actually understand basic finance and have some common sense about their decisions because they can't devote a few hours to do research, can surprisingly find time to devote to any other topic at hand -- sports, relationships, reality TV, gossip, and celebrities.
Agreed. Figuring out a sensible way to fund college takes common sense about one's individual circumstances. If an 18 year old isn't capable of making an intelligent decision in that regard, then perhaps they should rethink going to college at all. Another alternative would be to live at home, go to a local community college where tuition is affordable, and get a part-time job. It's always possible to transfer to a four year college down the road - when more maturity and knowledge about money kicks in.
I would have loved to have the full college experience by living in a dorm and attending classes full-time during the day but it just wasn't an option for me. I accepted my circumstances and worked around them as best I could. When I transferred to a four year college, I worked full-time during the day and attended classes at night. It wasn't the ideal college experience but to me, it was the next best thing (and it sure beat getting myself buried in debt for years on end!).
I have mixed feelings about private school loans being predatory.
When I first heard about them, I was stunned that these lenders were encouraging people to apply and receive these loans and then use them for whatever. Rent an apartment, buy a car, take some trips.... I wish I was kidding here. It seemed as if you could use these loans for everything AND school.... and after you get up to your eyeballs in debt, you can't bankrupt your way out.
When I was in college, the school loan went to the school, and was disbursed by the school. And the school had rules in place. A loan could be used for school expenses. You could use it for tuition, room and board in a dorm only and books and supplies. If you lived off campus in an apartment -- you were on your own to come up with that money. I did it for a few weeks.... I was miserable and went back on campus.
My own loans weren't enough to pay everything, so I worked. I bought my own books and supplies, and in the last quarter, I paid my own room and board because I knew the loan wouldn't cover it.
Now -- I wasn't an exceptional student. I am of normal intelligence. *I* understood my loans, and what they did and didn't do. I understood that my salary would be about 10K when I got out school, if indeed I got a job in advertising. And I understood that owing a lot more than what I made was kinda dumb. So I didn't do it. I found a workaround, and I did it, so instead of having about 15K in loans I had 5K in loans. And my loans were a small fixed rate of 4%. My husband did almost the same as me, but he became an RA (resident assistant) and his room and board was covered, so he worked in the summer in a mill making $$ to save to assist his loan amount of 2500.
I don't know why -- I smelled scam from miles away. And plenty of people didn't. Now plenty of people are stuck with school loans they can't possibly bankrupt out of for way more than they can earn in years. And the only winners are the lenders. THAT'S predatory.
I liken the whole thing to payday loans. People are crazy to use them, but plenty of people use them....and once in they can't get out.
I'm all for personal responsibility, but we as a nation need to change the conversation about college. We don't want to stifle kids dreams and futures as they transition out of high school, but very few people give kids the real story and the proper information to make smart decisions as they decide on college. Everybody has became complacent in this system of making sure every student has the chance to go to college despite real long terms costs and as a result college costs are outpacing inflation, debt is increasing far above inflation and any other form of debt, and students are finding it harder and harder to find job placement post college. It's easy to single out a case of personal responsibility but you just have to look at a few charts about college costs, student loan debt, etc. to figure out that we are headed in the wrong direction statistically, and this rising debt isn't something we want saddle on the future generations.
I'm all for personal responsibility, but we as a nation need to change the conversation about college. We don't want to stifle kids dreams and futures as they transition out of high school, but very few people give kids the real story and the proper information to make smart decisions as they decide on college. Everybody has became complacent in this system of making sure every student has the chance to go to college despite real long terms costs and as a result college costs are outpacing inflation, debt is increasing far above inflation and any other form of debt, and students are finding it harder and harder to find job placement post college. It's easy to single out a case of personal responsibility but you just have to look at a few charts about college costs, student loan debt, etc. to figure out that we are headed in the wrong direction statistically, and this rising debt isn't something we want saddle on the future generations.
Instead of funneling kids toward a college or nothing plan...how about giving other realistic well paying career options? I've read a few articles that say shop classes are disappearing in high schools. IMO, a lot of kids are better served learning how to be a mason, plumber or mechanic rather than trying to take calculus, organic chemistry or philosophy. And I'm talking about a way for lazy or less book smart kids to goof off and be separated from the college bound...actually teach them a trade and give them real world experience or an apprenticeship so they can hit the ground running.
Instead of funneling kids toward a college or nothing plan...how about giving other realistic well paying career options? I've read a few articles that say shop classes are disappearing in high schools. IMO, a lot of kids are better served learning how to be a mason, plumber or mechanic rather than trying to take calculus, organic chemistry or philosophy. And I'm talking about a way for lazy or less book smart kids to goof off and be separated from the college bound...actually teach them a trade and give them real world experience or an apprenticeship so they can hit the ground running.
I agree with you; there's absolutely nothing wrong with "shop" professions. It does seem like shop classes are a thing of the past though. I went to high school and college in the 80s and back then shop classes were a typical part of the curriculum. I don't think kids today even know what shop classes were!
I'm sure this is zero consolation to you, but you're not alone. I'm not in quite as deep as you, but I have plenty of loans too. I'm 31 and still living at home while I try to get a handle on finances. I'm working fulltime, but it's still ridiculous. Going to college is a catastrophic choice for millions of people. And nobody over 40 gets that. They're still pushing everybody to go.
millions of people? really? unemployment for college graduates is around 3%. for the overall population, nearly 7%.
Going to college has to be the worst decision I have ever made, and I know that nothing I do in the future will rival it.
So maybe college itself wasn't the poor decision, but the college I chose to attend as a first generation college enrollee at the age of 17. I'm now 29. I had little to no education in finance, and my idea was to attend a good school of my choice, that I'd get a solid career afterwards and would be able to pay these loans off. At least that's what we were told after the boom of the 90's: take chances! Take out loans! You'll be able to pay them back when the degree gets you a great job.
Now what?
Now, I'm well over $100,000 in student loan debt, most of it to private lenders like Citi. Despite paying on time and in full, they don't want to give me any options for lowering the monthly payment temporarily, and threaten high late fees if I begin only making partial payments. My federal loans are in good standing because they're more flexible and reasonable; private lenders don't want to bend in any way possible, not one penny, despite the payments I'm making being unfairly disproportionately high to my income right now.
Are 17 year olds truly expected to have the experience and foresight to handle the burden of signing a promissory note worth tens of thousands of dollars in debt? I could have bought a house with the debt I decided to spend on college instead. I am stressed, depressed, and competing for low-wage jobs. I can't believe this is my life now just two months from my 30th birthday, and there doesn't seem to be any hope or relief in the future for me.
Some small tips:
if you have a Citibank checking account, you can sign up for "Thank You Network" rewards. by having a checking, savings, and "line of credit" account set up for overdraft protection (that I never use), i earn enough points to snag a $25 check towards my student loans approximately every 3 months. Then, citibank has a Thank You credit card where you get 20,000 bonus points when you sign up. That's worth about $200 towards student loans. I open the card, do what I need to do to get the points, then close it. Then a few months later, I do it again. I haven't counted it up recently, but I'm probably close to about $5,000 in cashed in rewards since around 2007. Just got my most recent $25 check and mailing it to Sallie Mae this week.
millions of people? really? unemployment for college graduates is around 3%. for the overall population, nearly 7%.
What about the underemployed grads and those with a "decent" salary is offset by their student loan payments? I'd like to see stats on that if it exist.
You borrowed the money, you knew the terms, and now you are whining about paying it back?
You say that to children that make bad decisions? The reason we have legal age of consent (for signing, as well as sex) is because children and young teenagers are not expected to be mentally capable of making complicated decisions.
The consumer loan industry is preying on the incompetence of our schooling system. We have not prepared these children to think critically and they are told by people they trust that they should sign the documents, pay the tuition with borrowed money, and one day a job will come.
After they graduate we tell em, "tough ****, go scrub those toilets for min wage. Not our fault you can't pay back your loans you lazy tard".
It is absolutely pathetic as a society that we have created a system to young adults out of their future.
Of course. Learning that loans must be paid back is a very important learning experience. It's sad that you don't seem to agree. Would you teach your children that it is OK to borrow money and not repay it?
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