Student Debt

AIR DATE: Tuesday, September 9th 2008
How does the cost of college impact students today?

It is amazing how quickly times change. Glen Wardlaw, a guest on today's show, talked about his family's finances following their move from Arkansas to Oregon during the Depression. "We didn't borrow money," he said. "Dad didn't believe in banks. He kept money on his person, what little he had. So when we got to Oregon we just made do with what we had."

At that time few people attended college. Today college is considered the new high school for many families, and a bachelor's degree is the basic education many parents hope their children will achieve.

But that education comes at a cost. Undergraduate tuition at the University of Oregon is about $6,000 a year for someone from this state. At Reed College it's $38,000 a year. And that is tuition alone -- add on the cost of room and board and textbooks and beer and you're up to $50,000. According to the US Department of Education, two-thirds of students in the US graduate with some kind of student debt. The average is almost $20,000.

Families look to federal student aid programs, but also private loans, credit cards and retirement savings when figuring out how to pay for college. So this means many students are coming out of school already plagued with debt. How does that debt impact their lives and the choices they make in their career?

How much did you -- or your children -- pay for college? Was the cost of the school a factor in chosing which college to attend? Did you consider the kind of job that would be available after graduation when incurring debt at the front end? Did credit cards ever come into play as you decided how to pay for school? How did the cost of college impact your life?

GUESTS:

Tagged as: college · debt · recession · reed college

Huge thanks for the useful information. I am a student and this sphere is very important for me. Before several months I have got cash payday advance in order I could pay for my college and now I have some financial problems indeed. MY debt is really huge and I really need another loan. Anyone not know everything about student's loan because many changes have been made about it. Anyway I hope that finally everything will be ok. Thanks a lot one more time for the  informative article and useful comments and I will be waiting for more such essential news from you in the future. Regards.

harold333 —

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lillyadams790 —
After 4 years of private college, 4 years of medical school, and 5 years of residency, I accrued about $150k in debt. Now in a thriving practice, I still have this debt looming over my head. However, when I talk to high school students about going to private schools versus state schools, or going to graduate school after college, I always tell them to pick the best school for them academically and go where their curiosity takes them. "The money will come, and you will pay back the debt," I always say. I never tell them that even as a successful physician I still am working hard to pay back these debts. Every penny of debt was worth it for the memories and education that I received, but it is hard to understand that when all you can see are the tuition bills.
merbaker —
As a 30 year old woman, I still have endless conversations with friends regarding debt, savings, schooling and the like. From both my experience and the experiences of my friends, it is clear to me that the biggest gift my parents have ever given me was the gift of a college education. I was told that my college would be paid for in full if I attended an in state school. I left college with the ability to start fresh, obtain a single credit card that i paid off every month and slowly begin to save every month instead of being burdened by that debt. Most of my friends, by contrast, are still, at the age of 30, paying off college loans. This huge monthly commitment has caused most of them to create an avalanche of debt through credit cards, car loans, etc. If all students had access to an education that could be walked away from without debt and along the way we taught them to be financially savvy in other aspects of their lives, many of the problems that face young people and adults alike in our society would vanish.
bria922 —
I had to choose a school i could afford in the long run. At least for my bachelors degree. (State School). I am now trying to start a grad school program knowing that the job i will be going into will not cover the type of debt i will in cure while i am required to be a full time grad student not working. As a teacher i will be paying off these loans for a very long time. yes there are ways to have right offs for those loans. At least they tout that. There are so many little rules that go with this that it is almost impossible to make it happen. There are so many jobs that require a higher education but the pay is not equal to the amount of debt one must in cure to get the education required.
paddlerbren —
I paid for my bachelor's degree with student loans. Since both of my parents worked, I was not eligible for grants and most scholarships. I also didn't have a job for much of my college career. If I could go back and do it over again, I wouldn't have done it. The bachelor's degree is worth it but the staggering, $65k debt? Not worth it. I have to get my master's degree in order to be able to find a job that will let me pay this debt off sometime before I'm dead.

Parents, please teach your kids about budgeting and spending habits. Students, don't make the same mistake I did and take out the maximum amount of loans your school allows. With debt comes interest and with interest, you'll be paying back far more than you borrowed.

Before too long, we're going to have an entire generation of young adults with college degrees and huge amounts of debt. Where does it stop? I think the cost of higher education needs to stop rising and that there should be more grants, work-study jobs and tuition reimbursement from the government.
thecaitycat —
I graduated Y2k and I am still in a world of debt. After interest a total of $120K and that's not even a Doctorate degree. I was lucky though because my first 5 years of undergraduate school was covered through an in-state grant that paid for full-tuition. My total debt out of undergraduate was approximately $20K. But then, I decided to continue on to a private school on the East Coast for my graduate education. Two years of graduate shcool put me back $80K. I initially thought I would continue to live on the East Coast and that I could definately pay off the debt in 10 years or so. But, that didn't happen. I moved back to the West Coast, Oregon, where my impressive graduate degree in Public Administration seems worth squat. My choices now, except the facts and try to get by in Oregon or move back to the chaos of "Politico World" and try to start all over. I opt to live in the serenity of the west. Now this debt I've incurred impacts every single decison in life. Because of the debt to income ratio. I can't buy a home or a car for that matter. I never took out credit cards nor spent money foolishy yet people who are careless and get into credit debt spending money on brand new BMW's can file bankruptcy and it all goes away. There lies the rub!
duncan2002 —
I absolutely refused to go into debt for college. Rather then go straight after high school, I took six years off to save up enough money to pay my entire two years at community college. From there I had established my own small business that allowed me to have a flexible schedule to go to a state university, which was paid by a full academic scholarship. I have two terms left, Fall and Winter, at which point I will have a Bachelor's and two Associate's and zero debt. People may try to downplay a state university degree as opposed to a private university degree, but the earning potential for private college degrees versus a public degree is marginal at best. I know plenty of private graduates, and even two ivy league graduates, that earn barely enough to cover their loan payment the size of a mortgage. I have been offered several jobs paying a mean of 50k a year, and with no debt, I feel that I am better off then my private university counterparts hands down. Moral of the story, save hard, work hard, study hard, and you can get all of your college paid for, and the money that you would have been paying on a student loan, save and put into an IRA, and by the end of your 20 year reunion, you will be better off then all of those private school graduates, guranteed.
textchampion —
I always thought that a college education was sold as a bargain or contract: get one and you'll make enough money at your job to pay off the eduction. With the cost of education over the last decade, I think it's no longer a good bargain. I graduated from college twenty years ago, my husband 15 years ago, and I received a law school degree 10 years ago. Despite paying off our undergraduate loans early, I will still be paying on my debts when my children start college. Without school debt, we could have bought three or four houses, instead we have only been homeowners once. The processes of school loans encourages students to take more debt than is necessary to pay for tuition/expenses. We have to be picky about what jobs we can take and haven't been able to truly do public interest work and follow our dreams. I chose private schools so I my education would be recognized across the national market place. Again, I think that bargain is not a good one and would encourage my children only to go to community or state schools. I think some children shouldn't go to college at all given the poor bargain in today's market place UNLESS they don't go into debt to go to school. We plan on helping pay for our children's education and having them wait until they can go without borrowing. We received no help from our parents and it has been a difficult intrusion on our marriage to carry such debt.
gingfitch —
I don't really see a problem with graduating with even $150,000 in debt. This is an investment in the future, not a millstone about your neck. The key is being intelligent about that debt. When you graduate and go into that job that pays $150,000 a year, don't immediately incur even more debt by buying an expensive house, expensive car, new speed boat, etc. Instead the intelligent graduate will continue to live on a modest budget for another couple of years while focusing on paying off the debt. Live on $40,000 a year (which would be quite comfortable for a single person) and put the other $110,000 into paying off debt. Within two or three years pretty much any college debt could be paid off and THEN you buy the house and car without any problems.
Steve Stunning —
Most people I know are making 40k-60k when they graduate. Even physicians won't make very much for several years as a resident before their earning potential increases.
rgfraley —
$150k right out of college indeed. I wouldn't bet your financial future on it.
portlander34 —
I think it depends on the field in which you are getting your degree. For instance, I went into $150,000 debt to get a law degree. Most first-year associates are earning $40,000 - $50,000, a far cry from the six-figure salaries and dazzling perks that occur frequently in John Grisham novels and David Kelley legal dramas. In California, for instance, a first-year associate's salary could be even less (unless you graduated top 5 in your class from an impressive school like UCLA or Stanford, etc., which I did not), because the market (esp. in CA) is so heavily saturated with lawyers - it is a state with over a quarter of a million practicing attorneys. I make more money as a legal secretary than I would if I were a first-year attorney in California... and no one can afford to live on even $50,000 in California.
JodiStringer —
If I hadn't received a full-tuition scholarship to attend U of O, I would have gone to community college. I tell all future college students that I talk to that there's nothing wrong with spending your first two years at community college. As a Resident Assistant in the dorms at UO, I met a lot of students whose parents' expected them to attend college, but who had no personal ambition or desire to achieve a degree. If you don't know what you want to major in, don't start out at a four-year institution. Also, the public schools in Oregon offer really top-rate programs and it just doesn't add up to go into debt to a private school. If you can get scholarships or parental grants to go -- it's worth it. But if not, head to a state school or community college.

I ended up graduating with about $10,000 in debt, and I can afford the $116/mo payment in my current job. But I also graduated with a degree that has job opportunities. Too many students end up studying something that interests them (History, Anthropology) but that doesn't offer a lot of career opportunities without graduate school. At that point, the money you've invested in the degree seems much less worth it when you can't get a job that has anything to do with the degree...
ORSunshine —
I was blessed to received financial help from my parents, and I graduated from the University of Oregon without student loans in 2006. My husband and I decided shortly into our marriage in the summer of 2006 that we would aim to live a debt free lifestyle. Since then, we've paid off our consumer debt and lived entirely without credit cards. We have a cash emergency fund in the bank and have been working hard, saving diligently, and paying cash for his tuition at Multhomah University. When he graduates this spring, we will have about $10,000 in a lingering student loan from his earlier studies that we aim to pay off within the year. It takes sacrifice. We live simply in a small apartment and don't take lavish vacations or buy the latest gadgets. But a lifestyle within our means during these years means that we will be financially independent and free from debt during our later years. Dave Ramsey, a radio host who is broadcast weekday evenings here in Portland on 1190KEX, is a terrific encouragement!
Micah R —
I attended a top private liberal arts college, similar to Reed. I chose my school not for the name, but for the experience. I wanted a small school that would challenge and cater to my academic interests. It did all that and more. At age 26, I still owe about $23,000 of my $27,000, but I would make the same decisions in a heartbeat. When financial aid packages came out each year, I would view these packages as a "first offer" and would often discuss the package with financial aid until my family could make the tuition amount. I feel that my debt is fair and well worth it.
erinerin —
I graduated from a private college in 1989 owing $100K in student debt which I successfully paid-off ten years later in 1999. Last year, I received a letter from the US Dept of Education claiming I owed just under $300 in debt from my student loan. They claimed that I missed my "final payment of $50" with $250 in added "fees" for collection. Luckily, I kept my paperwork indicating that I had successfully paid off my loan, but it took the involvement of a US Senator's office to force the Dept of Education to even examine my paperwork to correct the error. What was the source of the problem? The bank from which I received my student loan changed ownership three times since my loan was paid, and the "computer showed" that I still owed one payment, and the Dept of Education said that their computer information is the ONLY DOCUMENTATION they are required to provide to prove you owe on a loan. So, my advice, keep your student loan paperwork beyond the 7 years you're instructed to keep it -- keep it at least 20 years.
mydogatemyemail —
I went into about 30k of debt to get my undergraduate degrees. I feel it was well worth it since I got two very useful and sought after degrees. I can find good paying jobs easily, even in this bad job market. However, I have friends who got into almost 100k of debt for a degree with no job market. They ended up working at retail stores, as servers, etc. That doesn't make sence to me. I think if you use college as a tool to start or boost your career, some debt isn't a horrible thing. But, if you simply are in college because thats "what you are supposed to do after high school", or because you simply want to learn with no career objective then paying the high price is a bad move. Furthermore, if you just want to learn, audit the classes and save a few grand.
Breanna —
I inadvertantly helped my kids go to college without going into debt.

When their father died, his inheritance from his grandmother was about $15,000 in 1979. I had to decide what to do with that money. A lawyer advised me to set it up in a trust for the kids (then ages 7, 6, & 4 years).

This is different than a conservatorship because it allowed me to keep investing it as I saw fit, which I did. By the time each child arrived at college age, the trust was worth about $14,000 each. However, that trust did not belong to them. It was its own entity, so they did not have to list it when they listed assets on a financial aid form.

Wow!

They each qualified for more in grants than they would have if that trust had belonged to them.

jryden —
I am working masters in teaching at Oregon State university. Being an E campus student (my classes are mostly through correspondence online and meet only once a month) the tuition is much more expensive. It blows my mind, because we don't use buildings or campus services. Thankfully, my undergrad degree was paid for by family and a trust fund. Upon completion of a one year masters, I will be out $60,000 at 8% interest. That's instate tuition cost. It also includes money for living: I work part time, have class, and student teach during the day.
I am a 4.0 student, and the graduate school informed me I don't qualify for any scholarships because I attend the E campus.
I hardly believe that at a teachers wage I will ever be able to pay the whole of it off at an interest rate as high as my credit card!
Rachelle —
Student dept is a conscious decision by our federal and local governments - AND yourself! I am a graduate of University of Wyoming and as an in-state student I paid about $2000/term for a degree in engineering. When looking at graduate schools I ended up moving to Canada where my masters degree in mechanical engineering cost me $7500/year. This is NOT free money. It takes TAXES and a real commitment from the country's population to make university affordable. You have to chose your school with money as a big factor and you have to VOTE for affordable education.
vancouverite —
In 1996, I entered grad school at PSU and continued for 2-1/2 years, attending summers as well. Taking classes at night and financed by student loans, I accrued $30,000 of debt which, ten years later, I'm still paying off.

Despite finishing summa cum laude and among the top six students in the class, I could not get hired anywhere, applying for multiple positions at all levels of government. Frustrated, I finally took an unrelated job in the private sector and there I have remained.

Not being able to pursue my dream and saddled with debt besides, I have always wondered if it was worth it. To this day, anyway, it has not.
Mister Richard —
My student loan debt is $150,000 and it is ruining my life. After 2 loan consolidations and even upon locking in the lower rate on my federal student loans at 3% a few years back, my student loan payments are $1,100/month. I work a full-time job in addition to a part-time job on weekends to help me just barely keep my head above water. I am now living with my mother again after 13 years of living on my own, and it is heartbreaking. But, I simply cannot afford to make my student loan payments any other way. Many people pay $1,100 for a mortgage; I will never own a home, at this rate. I financed all of my undergrad and law school expenses on my own, as my parents had no money to help me or my other siblings with this endeavor. After graduating from law school (while working full-time to help defray expenses), I took out a "Bar study loan" of $4,000 so that I would have money to live on while I studied full-time the entire summer for the Bar exam. I failed the exam by 12 points. By that time, all of my deferments on my student loans had expired and it was time to re-pay. Because the loans were consolidated, there was no way (and there still isn't a way) to further postpone the payments or defer the payments, etc. This meant that taking any further time to study full-time for the Bar was out of the question, because my student loans have to be paid, and I cannot qualify for a loan amount that is high enough to allow me to sit and study full-time for 3-6 months and simultaneously allow me to pay my bills. I am living my worst nightmare: $150,000 in debt, a failed Bar exam attempt, and no possibility in sight of being able to take it any time soon. I am sorry I ever went to law school and if I had it to do over again, I would not do the same thing.

However, even if I had stopped my education with a Bachelor's degree, I would still be about $50,000 in debt, and there are scarcely any jobs available that pay a college grad what they are worth. I see job ads ALL THE TIME that require a "minimum of a Bachelor's degree" and the pay is between $10 - $15/hour. $10 - $12/hour is a poverty level wage, and $15/hour is not much higher, so I don't know what these employers are thinking by requiring a job candidate to achieve an education that puts the candidate so far in debt and then trying to entice people to come to work for pennies. Employers need to get real, and real quick. No one is going to work for $12 or $14/hour when they have paid so much money out-of-pocket to get a degree that was supposed to open all sorts of doors of opportunity for them.
JodiStringer —
"I see job ads ALL THE TIME that require a "minimum of a Bachelor's degree" and the pay is between $10 - $15/hour. $10 - $12/hour is a poverty level wage, and $15/hour is not much higher,..."

That is about starting pay for Union Apprentices right out of high school and after they do four years of learning their trade their wages increase to be much higher.

One of the most successful people I know started right after high school pouring concrete driveways, a very hard job of labor, but he saved and built his business into a very respectable one.
Tom D Ford —
My husband and I owe over $100K for our undergrad and graduate studies. Although we both love our careers and are able (barely) to pay our loan payment each month, we are in no way able to save money for our son's education. He is now 7 months old, and I am having to work more than I would like to pay the bills. At age 19, when I first started borrowing, I could not begin to imagine what it would feel like dropping a baby off at daycare.
rgfraley —
I've got to point out that the caller who just said that he and his partner have a combined income of $75K a year and "that's nothing" income wise is suffering from the need of a reality check. He is making well-above the national income level for a couple in America. If he isn't able to make $75K work for him and considers it "nothing," then he really needs to reassess where he is spending his money.
mydogatemyemail —
My husband and I have strived to put our three children through college and have them graduate without debt. All have bachelor's degrees. Our youngest daughter has just graduated from the San Francisco Conservatory of music. Now she is taking out a huge loan to study Victorian literature in Kent, England. We are heartsick at the debt she is taking on. We tried without success to discourage her. We even refused to co-sign her loans. She leaves in a few weeks. She has no income of her own, has only held a minimum wage job (for a short time) and doesn't understand money matters. We are horrified at the situation she is getting herself into. We consider her a bad credit risk, yet she is able to borrow the money she needs to support her in a foreign contry for an entire year.
VickiJacobs —
Wow, that must be horribly frightening. You have obviously managed your money wisely as parents, but may have failed to pass on the importance of wise money management to your daughter. Her degree in Victorian Literature will likely lack any job market value and cost her tens of thousands of dollars. The best you can hope for at this point is that she will find a prince or duke to help her pay her bills!
ORSunshine —
You are so right! We obviously failed to commute a sound economic philosophy to our daughter. We also joke (privately) that she'd better marry well, even though we sincerely hope that such strategy is not part of her plans.

I've come to the conclusion that some people just make bad decisions when it comes to money. Sadly, our daughter is one of them. It is clear that she does not think forward to a time when she has more bills to pay than money with which to pay them. We have cautioned her that we will not be moved by pleas for help, no matter how awful things get. We've never had to employ this "tough love" policy before with any of our children. I predict some trying times ahead.
VickiJacobs —
The median family income in Portland is $63,800 for a family of four. With all due respect to the previous caller, a family income of $75,000 is not "lower middle class."

This is a very big issue that is difficult to deal with in just one hour, but one piece of the issue is the inability of Americans of middle income means to save money. We know that the baby boomers are historically bad savers.

We need to do a lot more as a society to make sure that college is affordable, but Americans have to be realistic about how much money their earn. The political -- and educational -- establishments aren't doing a very good job educating us about ourselves.
gronke —
I totally agree with you. I also think that it is unrealistic to base a student's "need" for college based on the income of the student's parents. I've had quite a few friends over the years who's parents made a great deal of money, but they refused to pay for their children's college educations. These students were not eligible for financial aid until they were in their mid-twenties and had been living on their own for over six years. This is really an unfair part of the aid problem that no one wants to address: parents who refuse to contribute to children's college financial needs.
mydogatemyemail —
I'm a non traditional Engineering student at PSU. I restarted my bachelors degree at 36 and will be 41 by the time I finish my masters. Fortunately I have been able to save money as an adult, find a field and pursue and education in something that I know I will enjoy and will pay my bills an likely complete my education with little outstanding debt.
That was not the story when I was 18.
As a lower mid class high school senior from coastal oregon and average grades in the late 80's I could not qualify for much in the way of scholarships and grants.
Military was the only choice if I wanted to make some quick college money. The GI bill eventually provided $27,000 for my education. I took advantage of this and it has served me well. I do lament the fact that in our country, of such great wealt,h we have no other alternative for students of low mid class, other than the military, to get a college education without a huge debt or postponing an education for many years or not at all.
Our nation needs a system to the military where low mid class teens, youth and adults can work/volunteer in social programs, environmental programs, healthcare programs and infrastructure programs that will give them experience in the world, food and lodging and generate college credit "credits".
Students also need better advising on how their choices for major will effect their financial future.
Scubaseth —
I went to Portland State and earned a bachelor's degree in English. I had thought that the degree alone would provide some sort of general qualification for a living wage job. Unfortunately, that was not the case. I returned later and earned a Master's degree, also in English. I would caution your listeners that for purposes of paying back student loans, not all majors, nor even graduate degrees, are equally suitable for the purpose. After struggling with those loans for nearly a decade, I realized that I would not pay them back in my lifetime working as an adjunct instructor. I realized I had to become a doctor, lawyer, or accountant; I can't stand the smell of hospitals, and was bored to tears by accounting. I went to law school at the comparatively late age of 33. I am now a lawyer, and, while the career is sensationally over-rated as a means to wealth (and markedly underrated in terms of stress and working hours) has provided me with at least the hope of extinguishing my loans in my lifetime.
CompelledRegistrant —
I regret attending higher education. I went to community college then Portland State and accumulated $29,000 in student loans. However, I also have $10,000 in credit card debt from my first 2 years of school as I was not eligible for student loans due to my parent's income- none of which went to my education. My partner(an accountant) and I reviewed my debt to average wages in my field and realized that, financially, it didn't make sense for me to go to school. Further, due to the number of graduates in my field it is VERY difficult to get a job just out of college. I wish that I'd had this information before I started. Now, it is with great frustration (and a bit of hopelessness) that I pay $500/month for an education that has not helped me to find a job in my field. I am unable to afford a car, a home, or many of the things that are associated with life of a college graduate.
fuzeesnoball —
My daughter is now in her junior year of international high school on an IB diploma track. She will probably enter college as a sophomore, depending on the college. She is considering both Portland State and Lewis and Clark. What will be the difference between a private and public university in this case?
robinM —
It will depend on the scholarship and grant opportunities at both colleges. It would be wise to get your FAFSA complete and have her look into the scholarships offered by both colleges. I found out that some private schools close their "priority" scholarship applications in the fall (so she would want to look into them this spring and get ready to write her essays and get letters of recommendation over the summer.)
ORSunshine —
We need to remember that student debt from attending public colleges and universities is a fairly recent political phenomenon,. Before the Reagan era, public education was very affordable. I, for example, went to law school at the University of Califonia, Berkeley, for $500 per semester, which I could pay through work study. I graduated from law school with NO DEBT. It was Ronald Reagan who changed all that because he resented the student activists and argued that a heavy debt load would keep them in line. Eliminating federal grants to public state schools and students was one of the hallmarks of Reagonomics.
barbara dudley —
Thanks for writing that, it needs to be told over and over, Reagonomics, Conservatism, just does not work for people.
Tom D Ford —
Thank you for addressing this important issue! I am a 29 year old Portland State gradate and mother of two. I am $50,000 in debt from my bachelor degree and my annual income is $41,600.00. I'd like to study for my master or further but that is not a realistic goal while I am carrying this $50,000 student debt. I found it very frustrating that my pre-degree income only increased by $10k after 6 months of job hunting.
I recently heard a co-worker suggest that rather than the economic stimulus plan, forgive student debts and let our $200.00+ monthly payments flow into the economy. It doesn't sound like a bad idea.
HeadofHousehold —
I am a 48 year old federal employee that has been working on a masters degree for 5 years. I have 16 and 12 year olds and very little saved for their college. I have to put my masters on hold as I cannot afford the $2k per class with a mortgage and my kids' college costs looming. My employer talks alot about funding education but its all lip service. I am not eligible for any aid and feel bad taking out a loan for my college when I feel responsible for paying for my kids. Not sure what to do.
mrs.anne —
I got out of UC Berkeley with very little debt. I think I was in about $4,000 at most. The key:
1. No car. I cannot stress that enough.
2. State school.
3. Live as cheap as possible. I took advantage of the co-op system, which provided room and board at a set price and allowed me to work for some of that cost.
I think people take a lot of expenditures for granted. Cell phones, cars and eating out are all luxuries. College is a time when you should be living as cheaply as possible, because you're not bringing in much income. Don't take any expenditures for granted-- pare down your life as much as you can.

I also have to say that not every college degree is going to be worth the expense. Look seriously at what you're studying, what you're spending, and compare that to what people in your field are making. I know lots of artists living in a hell of collections calls because they splurged on a ridiculous college education that they couldn't pay off after graduation.

portlander34 —
I decided to change my career a few years ago and go back to school. I spent one year at PSU taking science classes and 1 1/2 years in an accelerated BSN Nursing program at Linfield College. Being accelerated, it was difficult to maintain a job through the program. I had not only federal loans, but also a private Medcap loan to pay for school and for my living expenses. At the end of this 2 1/2 years of school, I am about $46,000 in debt. Thank God the federal govt has a program for nurses in which they pay around 80% of loans back if you qualify for the program. Without the help from the govt, I would not be able to live the life I had imagined when I decided to change careers; mainly buy a house, save for vacations, etc. If the govt can afford to pay for these type of programs, why not just help out in the from the start and allow more low interest loans to be available to students?
sarahv —
The government provides the pay-back services upon completion of the degree by the student -- thus avoiding paying for students who don't end up finishing the specific program (healthcare) that they started in. It kind of makes sense when you consider the college drop-out rate...
ORSunshine —
As a father, I always feared the coming expense to send my daughter to college.

Fortunately, at the time we were living in Louisiana, which has an unbelievable program; ?Tuition Opportunity Program for Students?, (TOPS).

http://www.lpb.org/programs/affordingcollege/tops.html

As I remember, ALL graduates of any Louisiana high school, having completed a minor amount of certain ?pre-college? courses during high school, and scoring at least average on the ACT, had their tuition completely paid by the TOPS program.

We only had to pay for her books, room and board, and living expenses.
Pacific Land —
What happens in other countries? Is higher education provided to people so that they don't have huge debt when they graduate?

Shouldn't the employers who benefit from having college educated employees shoulder some of this burden?

A presidential candidate was talking about rewarding service (social, medical,military) with a college education.

Sure seems like this might be one way for everyone to afford college.


NicolasG —
I lived in Germany for 10 years and university there is free. You read it right, free.
mrs.anne —
It wasn't free. It was paid for by everyone, which isn't necessarily a bad idea, but definitely not free.
RebekahPNW —
We have a specific situation in that we have college debt from helping put our sons through college and we have debt because I (the mom) have also gone back to college. Our sons did incur some debt, but because of our income, they were not eligible for grants, only loans, so we took out loans to help with their education. I have been able to get a small scholarship for myself, but that will cover only part of the costs. We are a hard working family, with both children and parents working to cover our living expenses. Now our kids are paying off their losns and we will be paying on our loans for years to come. Unfortunately, my husband and I are facing the need to be saving for retirement in the next ten years as well. We feel we are caught in the middle. However, since I have no marketable skills, this has seemed like the best option for our family. Hopefully, I will able to contribute in a meaningful way after I graduate, which will be in Spring of 2009.
kfurnanz —
I graduated from OSU in 2003 with around $32K in school debt, and an additional $10K in credit debt accrued during my undergraduate studies. I worked ~20 hrs./week and took about 17 credits per term. I was an in-state student.

Some pointers I have for young students would be:

-Don't rush through it and take 17 credits every term, or pack on the summer term classes because its not worth it. It's not a money saver to overload onesself with credits in an effort to reduce the time it takes to get ones degree. You're not charged per year. :P

-Be very careful about the degree you select! If you plan to take out loans, do consider what field you want to go into! I started in Zoology, but realized I'd never get out from under my debt simply because zoologists are not highly paid, and the jobs are few and far between. I, then, added on a Biology degree, but in that I also ran into the same problem: there are a lot of biologists in Oregon but not a lot of jobs... Particularly when the government stops funding conservation efforts and all the government jobs dry up. If you are gonna take out loans, pick a field that will get you a job, or even better - a good paying job. My chemistry minor saved me, because apparantly everyone needs a chemist.

Parents: don't force your kids into college before they understand debt and credit, particularly if it is up to them to pay for it. I was 17 when I started and a total idiot regarding money, and was responsible for all of my loans including stafford, and perkins loans. Make sure your kids know they will be paying off loans for a long lonnnng time, and that they consider the job market in the field they want to study.

Thanks!
trelanea —
My husband & I each have loans that when added together is $120,000. It's hard for us to save for our children's education when we won't be done paying off our loans until they're in college. I wish that my high school counselor (12 years ago) would have said "let's talk about how you can afford college with as little debt as possible" instead of "don't worry, you can just take out loans".

I am glad to hear that college are rethinking financial aid (there is hope for my children) but what about those of us who went to school when thoughts about financial aid were different & accrued way more student loan debt than manageable?
m01ollie —
I have one daughter leaving for the U of O this fall. My wife and I have put away $100 a month 18 years (her lifetime so far), and it is not enough money. When completing the FAFSA, this money is figured in and effectively excludes her from assistance. What frustrates me is that my daughter will likely finish school with debt despite her parents acting resposibly to provide--shouldn't there be some reward in terms of assistance for those who act responsibly?
B Sparks —
Wow, that's an interesting point. Thanks for sharing that. It gives me a lot to think about and to investigate.
RebekahPNW —
I consolidated my student loans at 8% in 1998. Interest rates plummeted, yet I continue to pay 8%. I tried unsuccessfully numerous times over the years to reduce the interest. Does anyone know of a way to do reduce the interest rate other than increasing the length of the loan?
RebekahPNW —
Mine were at that same rate, but have dropped since I consolidated with William D. Ford.
kaloveah —
ONE REMEDY: Start teaching high school students PRACTICAL money management and what it takes to maintain financial health as an adult. At the present the vast majority of high schools do not require all students to take any classes that might cover this vital area. If only we taught them this, as well as nutrition and parenting skills, we would see those seeds come to fruition when they become adults. These classes should not be electives. Everyone should have to take them. If this was accomplished I feel that students would be more practical when approaching the question of debt as they begin their collegiate journey.
maryny —
As a former administrator at a very prestigious Ivy League graduate program I oversaw admissions AND financial aid. A student loan debt of $100K+ was not uncommon, which given the degree programs --an MFA in Poetry for example--were quite clearly not going to provide a means to pay off the loan anytime soon, if at all. As tuition approached $30K a year I instituted a policy where students had to sign a "waiver". They had to sit in my office in front of me and calculate their monthly payments over 10 and 20 year periods. Once they filled out the dollar figure (in pen, but should have been in blood!!) I would let them proceed. This was out of my own concern but was absolutely not a real requirement.
For the most part this did not deter a single student--the average age 28--but I do hope that as they reflect back on their debt their ire is not directed entirely at me or my office. I never encouraged anyone to borrow more than basic tuition--and had a large work study budget to assist them in finding easy work within the department. Still I saw students funding vacations, nice apartments, etc. One woman in her late forties took out over $70K in debt to take care of her elderly mother. Her MFA was in creative writing. I pray she gets a book/film deal some day, but currently she's working for a nonprofit.

It was very depressing to oversee such folly and in the end it caused me to leave the school as tuition and fees neared $40K annually. For a medical degree maybe. An MFA? No way.

(And the irony .... while there I was taking courses for free to finish my degree because I didn't want to take out any student loans--it took 6 years but I did it, bought a house in the process, and now live entirely debt free).
AnnetteD —
Im sorry i didnt get in before the show was over. I was in the car. I just wanted to say how much i love my student loans. I know that sounds crazy but its true. Nowhere else can you get a loan with a rate that is less than inflation. I went to Linfield as well an I only wish i would have taken out more loans and saved my money for investments. With all the talk about how bad student loans are, and i agree there are some pretty bad ones and some people are in a bad place, i have a positive look at my loans. I just wish there was more available from the government with the low interest rates.

Thanks
spricke —
Yes, I would love that loan, too, but mine are at 8%.
RebekahPNW —
I just turned 20 and am struggling to get a higher education. Students who don't have the support of a parent or the government are generally from middle class families who's parents make just enough money to get by but not enough money to help their kids or receive sufficient financial aid. Education in America seems to be set up to benefit the upper class, if you have money, you can receive a higher education, if you don't you can struggle to get an education that will not match that of a wealthier student and you will be paying for it your whole life. I think in the long run this is creating an even larger financial gap and will result in drastic income and wealth inequality.
JoRose —
REMEDY: Communities create own free universities...
JoRose —
I received a 4.0 in high school, although I often worked 5 days a week, from 3-11pm, to help my family. I believed that my good grades and hard work would get me into a good college. No one in my extended family had raduated from college, but my mother always insisted that I would accomplish this.

My high school counselor told me that I should go to community college because my family had no money. This was the first of many times in my life when I decided not to listen to people telling me I couldn't achieve my dreams.

Since my family was ill-prepared to help me apply to colleges I found a teacher to guide me through the process. I was accepted at Scripps College, in Claremont, CA, and received federal financial aid as well as scholarships and grants.

I worked all summer to save money to buy my plane ticket to California. When I arrived at Scripps I was broke - I soon found out that the college expected me to have a substantial amount of money for books and other expenses. The financial aid office didn't know what to do with me. and basically stated I was in the wrong place if I had no family to help me financially. I persisted, however, and got the first of my private college loans, which totaled about $8,000 by the time I left school. I also worked 20 hours a week during college, while most other students used that time to study.

I later earned two masters degrees, in Public Administration from Portland state University, and in Teaching from the University of Portland. Partly due to the fact that UP's MAT year-long program does not allow one to have employment outside of the program, I ended up with $100,000 overall in student loan debt. [In order to continue teaching in Oregon, one must earn a Masters degree within three years.]

As a public high school teacher I was not eligible for any loan forgiveness program (I know of no positions locally that are eligible for this program). I consolidated my loans with Sallie Mae, and agreed to pay 4% of my income, which was all I could afford. This did not cover the interest, so my loans actually increased each year.

I assumed that I would pay on my student loans for the rest of my life, but as long as they were payments I could afford, I was all right with that. However, Sallie Mae, a privated company, began outsourcing its customer service and changing its policies, and became almost impossible to deal with. My payments suddenly jumped to almost $700 a month, a huge percentage of my take-home income, and I was in danger of being reported to the credit agencies and ending up with a collection agency.

I did a lot of research, and found the William D. Ford agency. Their repayment policies would enable me to continue making payments I could afford, and avoid ruining my credit. At that time, though, federal laws (which were just put in place) stated that I could not consolidate with them unless I took out new loans.

While I pondered my options and continued trying to work with Sallie Mae, I decided to call WDF one more time, and see if there were any other options...they notified me that federal laws had changed once again, and now I could consolidate with them right away.

Their repayment policies are flexible enough to work with my income, and they keep me from ruined credit.

Also, as a high school teacher, I witnessed my students receiving less and less federal aid over the years, while commercials for private student loan companies were plastered everywhere. I believe this is another example of unethical corporations preying on the neediest and most vulnerable populations, and the federal government letting them get away with it.

The best way to keep students out of debt is for parents and other family members to fund a college savings plan.

However, I know from personal experience that many great students who are deserving and are capable of making wonderful contributions to society don't come from families who do this type of planning. Imagine what it does to someone's financial and emotional life to saddle them with anywhere near this type of debt just as they are starting out in life.

I hope that more students find out about William D. Ford's programs, and that this agency is allowed to continue helping people finance education in a safe and sane manner.
kaloveah —
Sallie Mae is the bane of my finances! I have a consolidated loan through them that is less than 2% so I'm really scared about taking my loan elsewhere. I agree that their constant changes and bad customer service only work to the detriment of their clients. Unfortunately for the graduates from my school, the ?loan counseling? required before leaving is headed by a Sallie Mae representative and they provide only information on their service. When I left I had no clue who to take my loan to.

I'm glad for you that you found a better alternative; perhaps I will call William D. Ford and see if they can match my current rate.

As a note for the forum in general, student loans are a great way to develop good credit slowly and safely, if you get the right loans to begin with. Good luck to everyone who owes.

amy-OR —
Staying at home while our girls were young was a family choice, but it did not help us financially to afford the high cost of college. Our elder daughter was attending a private college which granted her enough money to attend the first year (it would have cost about the same to attend a state school.) Although the grant for her second year was still generous, it was less, the tuition was more, and with my recent loss of a job, we just weren't willing to incure the risk of $52k in debt(before adding interest) when she graduates. So after much research, she has chosen to attend college in Canada. Our debt will be substantially less and we believe her education will be exceptional. Our younger daughter will be attending college next year and I am returning after 35yrs to complete a bachelor's degree. Hopefully with a new administration, some of the economic issues we face as families will see relief. At 60 I cannot afford college debt, but need a degree to secure a decent paying job.
Kathryn Powell —
I think that it is way too biased towards college educations and the debt that demands.

I did three years at OSU in Engineering, which was a wrong decision for me, I ought to have chosen Science, which I still am enthralled with.

But the best move I ever made was in joining the United Brotherhood of Carpenters Union; I absolutely love construction, building homes for people to live and work in, movie theatres to entertain them in, ski lift buildings to help get them up the mountain to ski, and bird feeders just because.

I really think that Trade Union schools ought to be more emphasized, that hand labor should be more honored and valued. Plumbers, electricians, roofers, carpenters, iron-workers, concrete workers, construction machinery operators, brick and block masons, and even just the wonderful laborers who support all of the trades. The best masonry foreman I ever worked with was out of the Laborers Union, he knew everything about running the job and how to inspire both the masons and the laborers.

Signed: a Mensa, Union Carpenter Foreman, and lovin' it!

Er, good money too.
Tom D Ford —
One thing that hasn't been mentioned in this discussion are service commitments in exchange for an education. Two years ago, my wife and I quit our jobs and moved to a small midwestern town so that I could pursue a graduate degree in special education and blind rehabilitation. The program I attended was funded by a grant from the federal government. It paid all tuition, fees, and paid a monthly stipend.

Everything went fine until the powers that be in this particular university program decided that I did not have what it took to succeed in this field, regardless of the fact that my grades were fine (3.29 GPA) and all my teacher reviews were satisfactory, and kicked me out of their program. So there I was, no degree, no certification, no means to get a job, and rougly forty thousand dollars worth of service commitments that I now could no longer honor.

I didn't go into school with the intention of going into monetary debt. But that's where I found myself. Let this be a cautionary tale to others who might consider exchanging service for an education. Exercise due diligence when investigating universities, and any sort of obligations you incur. Service commitments may not be monetary debt, but they are debt.
pdschuyler —
After reading all the posts from 1 to 63, it seems to me that we need to return to the Liberal idea that investment in educating our people is an investment, not a cost, that we ought to look to Nations like Germany for ideas about education and trades.

Norway, Finland, Sweden, wherever good ideas are being brought to fruition.

Conservatism is Cilling our Cids! (mispelling intentional)
Tom D Ford —
I recently earned my undergraduate degree in Photography from Columbia College Chicago. After 4 years of studying there, I left the school with just over $40,000 in debt, that's even with numerous scholarships and grants that I was awarded while in school. After finishing, my biggest monthly expense is my school loans, which is right around $400 a month. Rather than work some job I don't really enjoy just to pay off my loans, I devised a way of selling my work, that will earn me money to pay back my loans, while also donating a portion of the money back to other aspiring artists. This is my way of trying to repay my school loans in a creative fashion that will benefit me, as well as others. If you are interested in seeing the project... please check it out at printsale.brandonsorg.com
bmsorg —
I attended Linn Benton C.C. for four terms and then transferred to Oregon State University where I completed three years and received a B.S. in Sociology. Many students rely on their parents, financial aid, and working to make tuition bills. My situation is similar in scope, but unique as well. I entered college without the financial support of parents, but with an inheritance of 47,000 dollars. Over the course of four and half years, plus the help of almost 10,000 dollars that I accrued in government loans, I was able to meet all my needs: tuition, books, housing, food, utilities, and unexpected costs. I have now been out of college for about three months and have an expected loan payment of 112 dollars a month. I am very luck, because I now have a degree and have the ability to continue on with education later in life to further advance my career.

However, I am worried about the Portland, OR job market and the jobs that are available for social science majors. I am very concerned that I will have to move from this beautiful area due to the lack of opportunity and the level of competitiveness. I recently just got my first job working at New Seasons Market, nothing fancy?just a maintenance guy?but with just 11 dollars an hour with no credit card debt or a car/car payment I am actually able to pay my loan, live "lavishly" and even save money. Sure, my life is simple?I live in a small two bedroom house with my girlfriend, but I am very happy. I can afford organic food on a daily basis, I have a wonderful bike that I can commute all over Portland with, and I have the ability to continue to look for better paying jobs.

Before I entered college, I thought hard about the other possible investments besides education, but ultimately I made the choice to pursue education. Over and over my high school counselors reassured that higher education would pay off in the long run... I couldn't agree more, college for me isn't just about becoming skilled so that I can be an effective member of the work force, but about learning skills that will help me be a more responsible community member, a more egalitarian partner, a better father (when that time arrives), and most of all, a critical thinker.

College is expensive and it is becoming more and more difficult to get a four year degree, but it can be done. My advice?only spend what you need, always try to save more, and construct a social network of friends and places to go that do not require a car, travel, or lots of money. Also, work!?do whatever you can to make money on the side and do not depend on a credit card to supplement your income, only use it for emergencies. One last thing, explore the post college employment options with the major that you are thinking about. I don't want to scare someone away from doing what they love, just make sure that you investigate that what you love will support yourself....

sims507 —

Its been a problem in the last few years but now a days its no longer a problem at all.Many cash advance programs has been introduced and due to which many people have got the loans.I think its been a great help to the poor people of the community and has helped a lot.

cashadvance —

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