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Forum Post: For those who think that we want a handout when we are asking for education help

Posted 2 years ago on April 20, 2012, 12:23 a.m. EST by sato (148)
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Between the ages of 18 and 22, Jodi Romine took out $74,000 in student loans to help finance her business-management degree at Kent State University in Ohio.

Ms. Romine's $900-a-month loan payments eat up 60% of the paycheck she earns as a bank teller in Beaufort, S.C., the best job she could get after graduating in 2008. Her fiancé Dean Hawkins, 31, spends 40% of his paycheck on student loans. They each work more than 60 hours a week. He teaches as well as coaches high-school baseball and football teams, studies in a full-time master's degree program, and moonlights weekends as a server at a restaurant. Ms. Romine, now 26, also works a second job, as a waitress. She is making all her loan payments on time.

Total U.S. student-loan debt outstanding topped $1 trillion last year, according to the federal Consumer Financial Protection Bureau, and it continues to rise as current students borrow more and past students fall behind on payments. Moody's Investors Service says borrowers with private student loans are defaulting or falling behind on payments at twice prerecession rates.

http://finance.yahoo.com/news/to-pay-off-loans--grads-put-off-marriage--children.html

27 Comments

27 Comments


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[-] 2 points by ClearTarget (216) 2 years ago

Ahh yes, loan slavery and the self entitled 1%ers keeping the masses uneducated. Sounds like America!

[-] -3 points by fleaparty (-18) 2 years ago

Self-imposed loan slavery. That part seems beyond the grasp of the typical occutard. Borrow-up, assume things will stay perfect, default when they aren't, then blame someone else.

[-] 1 points by ClearTarget (216) 2 years ago

Thanks for proving my point - typical conservatard trying to keep everyone uneducated and easy to manipulate. People should just stay uneducated if they can't afford it right? Just remain as a stepping stool for the wealthy? Do the 1%ers compensate you that much to suck on their phallus and guzzle down their cum over the internet?

This world would be a much better place without you and your kind.

[-] 2 points by amanofnoimportance (82) from Orlando, FL 2 years ago

There has to be a better way to access the knowledge that is in college curriculum for any given discipline, and to express competency for the accolades of it without the student loan debt.

Even if only for sheer enrichment, there has to be a way for adults to keep learning freely.

[-] 1 points by gestopomillyy (1695) 2 years ago

the law that says you do not have to pay anymore than 15% of your income for you student loan payment! why doesnt any one know this?????

advise these people to re read the conditions of student loans at www.nslds.ed.gov

here is another link explaining how this works http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRPlan.jsp

What is Income-Based Repayment?

Income-Based Repayment (IBR) is a repayment plan for the major types of federal student loans that caps your required monthly payment at an amount intended to be affordable based on your income and family size.

Top What federal student loans are eligible to be repaid under an IBR plan?

All Stafford, PLUS and Consolidation Loans made under either the Direct Loan or FFEL Program are eligible for repayment under IBR, EXCEPT loans that are currently in default, parent PLUS Loans (PLUS Loans that were made to parent borrowers), or Consolidation Loans that repaid parent PLUS Loans. The loans can be new or old, and for any type of education (undergraduate, graduate, professional, job training).

Top Who is eligible for IBR?

You may enter IBR if your federal student loan debt is high relative to your income and family size. While your loan servicer will perform the calculation to determine your eligibility, you can use the U.S. Department of Education’s IBR calculator to estimate whether you would likely qualify for the IBR plan. The calculator looks at your income, family size, and state of residence to calculate your IBR monthly payment amount. If that amount is lower than the monthly payment you would be required to pay on your eligible loans under a 10-year standard repayment plan, based on the greater of the amount you owed on your loans when they initially entered repayment or the amount you owe at the time you request IBR, then you are eligible to repay your loans under IBR.

If you are married and you and your spouse file a joint federal tax return, and if your spouse also has IBR-eligible loans, your spouse’s eligible loan debt is taken into account when determining whether you are eligible for IBR. In this case, the required monthly payment amount under a 10-year standard repayment plan is determined based on the combined amount of your IBR-eligible loans and your spouse’s IBR-eligible loans, using the greater of the amount owed when the loans initially entered repayment or the amount owed at the time you or your spouse request IBR. If the combined monthly amount you and your spouse would be required to pay under IBR is lower than the combined monthly amount you and your spouse would pay under a 10-year standard repayment plan, you and your spouse are eligible for IBR.

Top What are the benefits of IBR?

PAY AS YOU EARN — Under IBR, your monthly payment amount will be less than the amount you would be required to pay under a 10-year standard repayment plan, and may be less than under other repayment plans. Although lower monthly payments may be of great benefit to a borrower, these lower payments may result in a longer repayment period and additional accrued interest.

INTEREST PAYMENT BENEFIT — If your monthly IBR payment amount does not cover the interest that accrues on your loans each month, the government will pay your unpaid accrued interest on your Subsidized Stafford Loans (either Direct Loan or FFEL) for up to three consecutive years from the date you began repaying your loans under IBR.

25-YEAR CANCELLATION — If you repay under the IBR plan for 25 years and meet certain other requirements, any remaining balance will be canceled.

10-YEAR PUBLIC SERVICE LOAN FORGIVENESS — If you work in public service, on-time, full monthly payments you make under IBR (or certain other repayment plans) while employed full-time in a public service job will count toward the 120 monthly payments that are required to receive loan forgiveness through the Public Service Loan Forgiveness Program. Through this program, you may be eligible to have the remaining balance of your Direct Loans forgiven after you have made the 120 qualifying as described above. The Public Service Loan Forgiveness Program is available only for Direct Loans. If you have FFEL loans, you may be eligible to consolidate them into the Direct Loan Program to take advantage of the Public Service Loan Forgiveness Program. However, only the on-time, full monthly payments made under IBR or certain other repayment plans while you are a Direct Loan borrower will count toward the required 120 monthly payments. For more information about this program, review the Department’s Public Service Loan Forgiveness Program Fact Sheet.
[-] -2 points by JPB950 (2254) 2 years ago

What's the answer? Public funding? It may come to that someday but not while it is a problem for a small number of people. Currently the average student loan debt for students that took out a loan is just around $26k. High but not impossible to pay off in a reasonable amount of time.

Based on the amount borrowed and what Kent State's estimated costs are (from their web site), she borrowed everything and didn't work at all when she was an undergrad. A summer and/or part time job couldn't meet the $18.8k tuition, fees, and living expenses, but it could certainly have cut her debt. She's in a difficult situation, but it is one she freely took on.

[-] 3 points by sato (148) 2 years ago

I'm in for 37k for a major in Electronics Engineering with a minimum wage job in which I can be laid off anytime and 2 unsuccessful interviews in a whole year. You are out of touch with the reality of recent grads.

(Yes, I posted this because I can totally relate)

[-] 1 points by DanielBarton (1345) 2 years ago

Dude what are you freaking out about most EE start off high 60k. Plus your needed in every job site in the world. You have job security i know our has a 99% placement rate of EE and if five years 100%

i know this because im a ME at school. Im not worried about my loans at all man.

Relax your loans will pay off just get that degree and wait for the jobs.

may i ask what school

[-] 1 points by JPB950 (2254) 2 years ago

My point is that as long as it's a problem faced by a minority of the population, there is not likely to be a strong push to change. Individual stories like yours or the couple in the article are not the norm at this point in time. You're unlikely to get loan forgiveness considered when the majority with loans have smaller loans then you and when a majority are paying them.

I'm out of touch with a lot, but I'm looking at the numbers rather then the situation of any one individual. The unemployment rate for high school grads is about 23% (77% working), for new college grads it's almost 9% (91% working). Underemployment may be double that figure, but it still represents a minority of all graduates.

[-] 1 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

You think working part time for minimum wage while attending school would have helped her? Not bloody likely and then there is the distraction of working instead of studying - yeah that is always good for learning.

OH & BTW - where are all of the students going to get these wonderful low paying jobs to screw-up I Mean help pay for their education anyway - seems to be quite a shortage for any kind of employment.

[-] 0 points by alexrai (851) 2 years ago

No kidding. Its hard to work and go to school at the same time, school is like a full time job, and you don't have a test at the end of a week of work.

[-] 0 points by JPB950 (2254) 2 years ago

Working 15 to 20 hours a week during the school year and summers could have cut her debt in half over her four years at school. Finding a job is certainly difficult but there are some jobs out there. Work would have helped, but not solved her problem. The article does say she worked and now wishes she had worked more to cut down on the loans. Apparently in this case she made a poor decision and now regrets it.

There is some research that suggests working part time while attending college can actually be beneficial. Part time on campus work being the best option. Full time work is detrimental though.

The main point I'm making is that her problem is one for a small minority of graduates. It makes for a sad story, but it doesn't concern a big enough portion of the population to be considered more then a cautionary tail for high school students contemplating college. A sort of welcome to the world of adult decisions and consequences.

[-] -1 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

Show me the math of working 20 hrs a week that would cut Her 74,000.00 debt in half over a four year period.


[-] 1 points by JPB950 (1452) 30 minutes ago

Working 15 to 20 hours a week during the school year and summers could have cut her debt in half over her four years at school. Finding a job is certainly difficult but there are some jobs out there. Work would have helped, but not solved her problem. The article does say she worked and now wishes she had worked more to cut down on the loans. Apparently in this case she made a poor decision and now regrets it.

There is some research that suggests working part time while attending college can actually be beneficial. Part time on campus work being the best option. Full time work is detrimental though.

The main point I'm making is that her problem is one for a small minority of graduates. It makes for a sad story, but it doesn't concern a big enough portion of the population to be considered more then a cautionary tail for high school students contemplating college. A sort of welcome to the world of adult decisions and consequences. ↥like ↧dislike reply permalink

[-] 1 points by JPB950 (2254) 2 years ago

The work is a side issue, but ok. Assume everything works out perfectly, 20 hours a week during the school year and 40 during the summer break, it comes to over 5000 hours for the four years. Minimum wage is just over $7 an hour in most places so at $7 that's a gross of over $35k. Agreed it's not quite half and there will be losses due to deductions, but borrowing $8000 or so a year less would improve her present situation. It's an option she herself admits was there for her and, in hindsight, wishes she had taken.

[-] 0 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

She was better off studying full time. Your best case scenario leaves out the costs involved like the un-calculated tax deductions as well as any travel expense etc. etc. Sorry you have not proved a substantial savings only the avoidance ( smart ) of un-needed stress.

[-] 1 points by JPB950 (2254) 2 years ago

The cost of getting to work and the loss of any social security contribution can't be that significant to cancel out the financial benefits to reducing the interest paid on that money when she elects to borrow it instead.

Out of curiosity I ran some numbers, at 6% interest on an online student loan calculator. She'll likely repay around $98000, had she worked and earned just $5000 a year and borrowed $20000 less, at the same 6%, here payments would be about $300 less a month and she'd save over $8000 in interest.

[-] 0 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

You again point out another fact of borrowing - the outrageous interest. And again SS is not the only deduction removed from realized income there is state and federal tax. All in all you do not make a very good case for sacrificing study time and energy to work part time. Though you inadvertently lend strength to looking at the questions of tuition and loans.

[-] 0 points by JPB950 (2254) 2 years ago

You get back most of the state and federal income taxes with that level of income, but it's up to the individual to choose whichever way is best for them. I mention work as an option in response to the article's implication that the loan is an extreme hardship. She chose to borrow most, if not all, of what she needed. The payments are high, but anyone could find that out going in and make and informed decision.

Interest rates for student loans aren't kept secret from the borrower. It only took me a couple of minutes to see what the monthly payments and total interest would be for loans of various sizes. She's expressed regret she didn't work more when she had the chance to and lower the amount of the loans. At the time she decided to just borrow, now comes the hard part of living with that decision.

A college education isn't free, we all know that, maybe it should be but right now it isn't. When you borrow you are stuck repaying. Her position is a minority one and there were other options open to her.

[-] 1 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

Her position is a minority one??????????

Is that because those who do not come from money are the minority in higher learning?

[-] 1 points by JPB950 (2254) 2 years ago

I have no idea what percentage of college graduates come from money. Somewhere around two thirds of all students take on some kind of debt during their college years. Does that mean one third are rich? Don't know, don't care.

The average amount of debt for those that borrowed was just over $25k. That places the young woman in the article, in a minority group at the high end of the borrowing curve.

Who knows, most people don't think or look too deeply into an article. Her plight might generate some sympathy and get a politician to use it to pander for votes.

[-] 0 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

Again not very helpful. Was she above the average on amount borrowed in total or by per year or in total - if in total was that also separated by years attended or by course's taken or by institution course of study? See it is not at all helpful or compelling to be so general in this type of thing.

[-] 0 points by alexrai (851) 2 years ago

I hope we will welcome the banks to the world of adult decisions and consequences soon... don't think you'll get that home loan back? Then don't write it moron.

[-] 0 points by gforz (-43) 2 years ago

And will you be moaning when banks start requiring 25% down payments in order to write them? Will you bemoan the fate of millions of middle class Americans who will be renting and paying for the new apartment complex boom of the 1%? Face it, we need banks, or if you'd prefer, loan sharks (I guess some of you don't see the difference). They provide liquidity, cash flow, purchasing power. If it's as easy as it sounds, I think you should start a micro loan business. Loan out $20, $50, $100 each to your neighbors. Don't worry about collateral, they'll PROMISE to pay you back. Credit check? Nah. Don't worry about it, they're your neighbors, ordinary hard working Americans. You'll be broke in a month.

[-] 1 points by alexrai (851) 2 years ago

Just sayin'

If the probability of getting paid back is somewhere around zero you should eat the loss. I have more sympathy for optimistic home buyers than I do for banks who employ people with degrees in finance.

I know we need banks, but we don't to prop them up when morons want to hit the easy money casino in the sky derivative market.

[-] 0 points by gforz (-43) 2 years ago

You're quite correct that the banking system needs to be "compartmentalized" I guess would be a good word, to cordon off the entire U.S. economy from their actions, and let them take the fall if they choose unwisely. Banks WILL eat the loss on most of those homes, in most cases the borrower didn't put much of anything down. They've been doing so at a very slow rate, rather than write down everything all at once and crash the market. Credit is a double-edged sword. A lender should really be able to tell if a borrower is capable or likely to pay the loan back, but there is a price where someone will loan you money. That's why loan sharks are in business. If you're desperate enough and will pay 100% interest, they'll loan you the money, and if you don't pay them back, well........ I'm hoping that people will wisen up and realize that home ownership is not necessarily the be-all, end-all of the "American Dream". Everyone should realize the permanency of owning the home, the fluctuations in the market, the costs other than the mortgage. Yeah, you get a interest and tax deduction, but sometimes you could put the rent and put the savings into another investment and be better off. With the lack of job security these days, people should have a significant amount of excess liquidity to withstand a job loss, that is, have a year or so of cash in the bank to pay your bills if necessary. That's not doable by a lot of people, so in my opinion they should rent until they achieve more flexibility. Don't count on the lender understanding your plight or your local taxing authorities. Of course, if you can get a loan with nothing down, you don't have much to lose. You can just give it back to the bank if you can't pay. Enough people do this and don't pay, the lenders learn pretty quick and credit dries up.

[-] 0 points by DKAtoday (27542) from Coon Rapids, MN 2 years ago

Exactly - but what is not being spoken is the fact that the banks could care less how it goes as they have no vested interest in the properties anymore, that concern has been shifted to the individual investor on WallStreet the bank is now a go between and gets their fees regardless of success or failure.

[-] -2 points by gforz (-43) 2 years ago

People work their way through college all the time. It might take the a couple of extra years to graduate, but they do it all the time. I have two girls who are in college at this very minute, one a freshman, the other sophomore. After doing a lot of homework, I can give everyone some really good advice. Have your kids either go to a junior college for the first two years and/or take most of their "core" courses online. After two years they can switch to a four year college and graduate from there. Most of the core courses are ubiquitous, they have a number designated to them and transfer to at least most in-state schools. And the cost? Well, I know because one of mine is at a 4 year school and the other at junior college, taking basically the same stuff. The 4 year is almost 5 times the cost for tutition and books. Online courses they can take in summer cost $130-$150 usually, or if they wish they can take it in a classroom at a local community college. We're going to save about $20k on one of our daughters by going this route. JC's are going to grow tremendously in the near future because you can still use financial aid there, even though it is inexpensive enough for most people to come up with the money, especially if it is a JC in town and you can save room/board, which is another racket all unto itself. In any case, there are certainly ways to drastically reduce the cost of university education, but you have to be smart. And do some homework on your prospective major, and find out what the prospects are for the industry, talk to people in it, find someone and tell the you'd like to buy them a cup of coffee and give you some advice. People like to give advice (kind of like me right now), and it can potentially save you from going into a dead-end field or one that there aren't really any realistic immediate prospects when you get out.