When I taught college English, I had a friend who ran the financial aid department. I went to him for advice when I decided I would cosign my niece's school loans for the expensive ($30.000.00 per anum) college I had urged her to go to since she was in the eighth grade. He said that for the next generation, their greatest payment that they spent time trying to pay off would not be their house payments, but their school loans. I think he may be right.
When said niece went to start paying her school loans, to her shock, the monthly payment was going to be $1400.00. She had gotten a good job, the very one she wanted, in her field, and the pay for a beginner wasn't bad either. But with rent in Washington, D.C., even with a roommate, she quickly learned that she wasn't going to be able to make that payment. She was going to have to consolidate her school loans.
Now my niece did get some financial aid, and she also got several scholarships, but there was no way in the world that she was going to be able to pay those school loans without consolidation, and even when she did consolidate the loans, they were still going to be a heavy burden. But what to do? Her education was very worthwhile, and I know for a fact that she not only wouldn't have gotten the knowledge and experience at a state school that she got at this private college, she also benefited from some great connections that resulted in her getting her rather desirable job.
So what are students to do? As a teacher, I know that the cost of an education is not out of line with what it takes to run a college - in fact, without contributions from alumni, the colleges would go broke! What is the answer? If you have one that is better than school loan consolidation, please let me know.
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5 comments:
You might want to visit this site http://passionsaving.com for insight about loan and savings before you think which is better. I came accross this site and think it'll help those who think taking a loan is a good thing. I think.
You are right about the student loans being a bigger deal than the house payment. I owe around $89,000 in student loans and am in partial forbearance (meaning that I can't even pay all the interest) even though I make $49,000 a year and have no dependents. It's horrible.
It's said that most British Graduates have at least 60% of their salary taken away from them in student loan repayments, tax and national insurance contributions. This leaves a pitiful 40% to pay for mortgages and general living. When you consider that most people pay about 30-40% of their income in mortgage payments anyway it begs the question what they're living off.
Cheers,
Rob
http://www.abouthere.co.uk/blog
I have been saying for a long time that if anyone really wants to be the "Education President", he or she needs to figure out how to make education affordable to all.
Don't they have income sensative repayment terms. I think it amounts to about 4% of income. The federal stafford loans offer this I believe..
Anthony
Journey Through Divorce
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