4 Mistakes I Made with My Student Loans and How You Can Avoid Them

Take out loan graphicIt’s been hard to come to terms with, but I need to face the facts: I’m not in college anymore. In fact, this spring marks two years since I graduated from college and went into repayment on my student loans. I know, not the most exciting thing in the world, but important. So while I don’t claim to be a student loan expert, I have learned a lot of lessons along the way, mostly through trial and error. In hopes that you won’t make the same mistakes I did, here are some things I wish I had known when I was graduating and getting ready to start repaying my student loans:

  1. I should have kept track of what I was borrowing.

Let’s be real. When you take out student loans to help pay for college, it’s easy to forget that that money will eventually have to be paid back … with interest. The money just doesn’t seem real when you’re in college, and I didn’t do a good job of keeping track of what I was borrowing and how it was building up. When it was time to start repaying my loans, I was quite overwhelmed. I had different types of loans and different interest rates. When I did eventually see my loan balance, I was pretty surprised.

You can avoid this problem. Had I known there was a super easy way to keep track of how much you’ve borrowed in federal student loans, I would have been much better off. Just go to nslds.ed.gov, select “Financial Aid Review,” log in, and you can view all of your federal student loans in one place! How did I miss that?

  1. I should have made interest payments while I was still in school.

If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans is not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.

     3. I should have kept my loan servicer in the loop

If you’re getting ready to graduate or have graduated recently and haven’t heard from your loan servicer, make sure you check that your loan servicer has up-to-date contact info for you. When I graduated and moved into my first big-girl apartment, I forgot to change my address with my loan servicer. I found out that all of my student loan correspondence was going to my mom’s address. I hadn’t even thought to update my loan servicer with my new contact information. Don’t make the same mistake I did. Keep your servicer informed of address, email, and phone changes.

  1. I should have figured out what my monthly loan payments were going to be BEFORE I went into repayment.

By the time my grace period was over, I had a decent idea of how much I had borrowed in total, but I had no idea what my monthly payments would be. I thought I was fine. I had started my new job and been paying rent and other bills for about six months. Then my grace period ended, and I got my first bill from my loan servicer. It was definitely an expense I hadn’t fully taken into account.

Don’t make the same mistake. Luckily for you, Federal Student Aid just launched a new repayment estimator that allows you to pull your federal student loan information in order to compare your monthly payments under different repayment options side by side. That way, you know what to expect and can budget accordingly … unlike me.

I’ll be the first to admit that this whole process can be a little overwhelming, especially when you’re new at it. But just remember, your loan servicer is there to help you. If you have questions or need advice, don’t hesitate to contact them.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

112 Comments

  1. I think student loans trip up nearly everyone. It seems so easy. You don’t even have to really sign anything anymore because all you do is type your name into the computer. So it almost seems like you get completely free money and they keep giving you more as long as you keep typing in your name and information. The problem is when that money comes due and it definitely does. These tips will help any student who’s thinking about taking out a student loan or even one who already has one. Thanks for the great advice.

  2. That old saying goes, “If only I knew then, what I know now”, I wouldn’t be in the fix that I am. Unfortunately for me, I was unable to continue my education. I was looking to gain a BA but I was informed that I couldn’t and that I was at the “Lifetime Limit” of student loans. The school I attended kicked me out and told me the only way I could continue my education was if I paid $685.00 every six months! As if I could afford that kind of money! Going to school and gaining a degree was supposed to help you gain better employment! Now I’m left with no degree but forced to pay over $57K dollars! I’m all cried out and I have no more tears. My hope for a better career is over. I find my calling, because I love Law. I should’ve went for a BA in Paralegal, but I can’t now because it’s too late for me and I can’t afford it and I see no solution to my problem.

    • Tobasha
      What you need to do is seek out a company who provides, “Written Depositions.” These companies provide services to attorneys and there is great demand in these areas. Written Deposition companys depending on there size may have 8-10 paralegals working for them. Start out working as an assistant. Two things could happen, you end up getting a job with the company or with an attorney.

  3. I think students don’t realize just how much ‘financial aid’ is out there that doesn’t require loans… private groups have established scholarships for anything and everything – just spend a few hours researching online – especially between November and March, when most applications are open. You don’t have to be a stellar student, have your family in dire need, or really have anything ‘different’ about you to pick up lots of scholarship money, you just have to search for it. Many of these scholarships aren’t widely known, which means small applicant pools that boost your chances. The Fastweb website is a good place to start, although I had the best luck simply googling scholarships with my major as a key word.

    I applied for an average of 15 private scholarships a year and normally was awarded about half of them. Those seemingly little scholarships add up, and in 5 years of school I paid for nearly $60,000 worth of school with scholarships alone. I didn’t work during the year, but got internships in my field every summer to contribute another 3-5k towards my schooling each year. The result? Graduating with zero student loan debt, and I feel so lucky to not have that hanging over my head alongside my peers.

    Pick your major wisely – I went to a public university but chose a technical/STEM based field with a small program at my school and extremely high employment demand – as in 95% employed in their field before graduation. I got very involved in the program which opened up more scholarship and job opportunities, and worked my tail off. It all paid off as I earned plenty of scholarships, graduated with high honors, and had my pick of job offers. The opportunities are THERE for college students if you plan wisely and take the time to look for them. Save yourself the stress of loans and take advantage of all the groups just waiting to give out money to students like you.

  4. It does seem from most of the comments that the student loan program as it stands now, sucks. Sucking at higher education is not something any society with any hope for any kind of future can afford. You must remember that the money is not the thing. It is only a method of keeping score in the game. Some of the rules are complex and some are very simple. If the overall outcome is not favorable or is not obtained efficiently enough then that game is a dead end. The rules will be changed by the players and mother nature. Mother nature is predictably harsh at times but Mankind still has boundary issues and gets involved in a disassociated state of functionality when faced with the opportunity to roll up a new high score or the illusion that the score must be higher than it is. This is what our political system is based on. Sometimes it’s not how well the bear rides the bicycle that is so remarkable, but that it can ride one at all. Do not feed the bears and do not get too close to the cage.

  5. I graduated from high school from a country in Southeast Europe. Cost of college in my country would have been $1000.00/year. It was almost impossible to get a job and earn anything close to the annual tuition. Come to US as international student, living with relatives. Tuition cost as an international student to the local Purdue campus, just over $10,000.00. With help from the relatives, I was able to get CDL (commercial driver’s license). Started as a driver, eventually bought own semi-truck, and worked very long hours through the summers, New Year’s break, spring break, and any time I could find in the week.
    Total cost of college for 6 years (BS Engineering + MS Engineering + living expenses) about $90,000.00.
    Money owed at graduation $0.
    God Bless America !!!

  6. Very little of education ought to be financed by student loans. In Europe, students are expected to study and not expected to work while in school, nor do they leave school with huge debts. We probably ought not do as some of the European countries do, but we could benefit from their example to modify the way we do things.

    Student loans were manageable when there was a good economy and graduates from college had good prospects. Now, only the elite graduates (Ivy League, specialized) are getting good jobs. I hear frequently of college graduates in minimum wage jobs. College is no longer a ticket up. When we have economic mobility for the few and low wages for the many, student loans are a form of indentured servitude.

  7. Ok so I learned the hard way. I was lucky enough to get a grant to help pay for college. I would still owe money after my grant. I started getting loans to pay the owed balance and I would actually request more than what was needed. Spending the money on books, clothes, and what ever else I wanted. Needless to say I racked up about 20k in student loans. After getting my degree, which took six years because iI started working full time, I was still working the same job I didnt need a degree for!! Im still at this job as I can’t find a job that pays better!!! Direct loan use to call me all the time for payments. Any way I was blessed that my father saved and saved and saved. He happened to pass away a year ago and left me alot of money. I was able to pay my loans off fully!! I used a check so I can have some proof at my bank atleast.

    I just wanted to say that it would have been nearly impossible to pay those loans back! I feel soooo sorry for people who have to live with these loans. They should make it so that you can only get enough to pay tuition and fees. They should not allow students to decide how much they can get for the loan. It dont cost that much to go sit in a classroom!! Tuition and fees cost way too much. The professors are underpaid. The books are expensive as hell and they change them every year so you keep buying them. Who the hell is spending all that money??? My college built more buildings but it wasn’t needed in my opinion. It’s sad to say but college was a huge rip off!! I have a BA in business administration and can’t find a better paying job than I have now that didn’t require a degree! Best thing about college is I did learn a lot. It was a experience that all should have. It still wasn’t worth what they charge. All the students paying tution and fees every year and they still raising it. A toltal rip off. Its a person with a masters degree working at my job in a call center. My sister has a degree in engineering and is working on her masters and she works at my job and not in her field! College was just a big rip off. I wish I went to school to work on cars or something else. Anyway I just wanted to vent. Thanks for reading if you did so.

    • I couldn’t agree more. So glad my son is going to college to learn a trade. Loans will be at a minimum. Good luck in finding a job in your field.

  8. I filled out the FAFSA for every year I was in college. I had a full tuition scholarship to cover my first 4 years of school. However, I had to pay for the last 2 years with student loans. I was very disappointed because I had a baby right before my last year of college and was forced to take out student loans. I did not qualify for a single grant, when I only made $10,000. I am now $35,000 in debt and cannot afford the $400 monthly payments on a teacher’s salary as a single mother… My sister on the other hand, no children, living on campus, got grants to cover half of her school. Someone explain that logic to me…

      • Leave it to Republicans to say someone doesn’t deserve to go to college and become more than a McDonalds server if they can’t afford it with cash.

    • OK, lets see, 6 years of college, plus having a child, all choices you made. Comes down to an issue with your choices, not student loans

      • Matt, I am sure she is aware of her choices and that does not have a thing to do with the fact that she owes the money and can’t afford to pay on her salary. Gee, maybe we can all walk on water one day like you

      • It is called taking responsibility for your actions — and it is something that eludes so many. I find it baffling that students have no issue taking out a $20,000 car loan but gripe at a $20,000 loan for an education. The benefits you reap from an education should have a much longer shelf life than a Mazda.

        • I was not going to be able to afford to finish college to become a teacher, which was my dream, without taking out student loans. I took responsibility for my actions. I am raising my son, and I finished college. I used my grandma’s car that she left my parents when she passed away. I bought a car that I paid $3000 for to help me get from point A to point B when my grandma’s car was no longer running well. I would never pay that much money for a car. I know I cannot afford it, especially since I can’t afford my student loan payments. I have gotten them lowered and will qualify for loan forgiveness (for some of it) after I teach 5 years in the school I am currently employed in. Thank you for all of your help and suggestions.

        • Parents do not have a clue about student loan and now the kids does not either. We have home economics, gym and every course taught in school but nothing about finance. Unfortunately this is not being taught at home either and many of us are having to learn the hard way!! If you cannot afford it then dont do it!! And now there is three guarantees in life if you owe a large student loan debt. Death, Taxes, and Student Loan debt!!

    • You should contact your loan provider. If your loans were through the Fed Gov you may be able to request a lower payment that is based on your income. It is worth looking into

  9. Recently I read an article where the GAO reported that our government collected about 51 billion in profits over the last 10 years from student loans. Yeah, right, that’s profit, after accounting and administrative fees. That 51 billion goes into the general funds to spend any way they wish. I fail to understand why our government, who says they’re trying to help young people get through college, would think they have to make a profit on the same people they claim to be helping. Of course, banks and financial institutions do the same thing called compounded interest calculations annually, for their profit. This is our government, acting like a bank, profiteering on the backs of people who were trying to create a better life via education. In the latest debate over raising student loan interest rates, doubling in fact, many politicians complained that if those interest rates don’t double, they could lose about 9 billion in profits. They called it a 9 billion loss but didn’t say in profits. Semantics! My opinion goes like this…If our government, who professes to want to help people to get a college education, would and could adjust the interest rates to comply with the costs of accounting and administration thereby removing the profit factor, that would be proof of their claim. It has been said by certain professional accounting experts that a rate of about 3% should be sufficient to cover the costs and maybe a small profit.
    Student loans are called “Subsidized Loans”. Mainly because if a student loan repayer doesn’t pay off the entire amount owed before the 25 year limit, that’s when subsidization occurs. The loan is forgiven and whatever unpaid amount is accrued to the repayer as so-called income subject to income taxes. Our politicians claim that’s why they need the profits, to cover any subsidization, and foregiveness, for any student who mayn’t pay back the entire amount owed. Our politicians also believed that there would be many repayers who wouldn’t pay any back so that’s why they included such things as no bankruptcies and limited deferments. Statistics have shown that most all student loan borrowers are repaying or have paid off their loans except for very few, until recently. With our economy struggling and job prospects dwindling, more student loan repayers are finding it more difficult keep up with those payments or even to make the payments, hence the “Student Loan Crisis”. Could lower interest rates help? Well, some, for those who can find a job, or get a deferment, limited at best. Can our politicians do something, like lowering the annual interest rates for all repayers, or extending deferments for the unemployed? They’ve collected the 51 billion in profits so the costs would be minimal for now.

    • Dave, you provided an excellent response to this article. Your comment was written as if it was a research paper. I think you should contact the government regarding this issue and I believe they may seriously consider your position.

    • Dave, your observation and research is an eye opening experience for many students who are at loss on growing cost of college loans. Thank you for sharing your view point.

    • While I won’t say federal student loans aren’t //part// of the problem, the crisis in student debt is being driven by private loans with less strict borrowing limits and guidelines (and much higher interest rates and back-end costs). Much like the housing crisis was driven by bad mortgages. The market for these loans is dwindling, but people are realizing their mistakes too late, and we’re starting to feel the larger societal costs of this. Ideally this will lead to the shrinking, if not out-right death, for these sorts of loans and for-profit colleges, but I’m not that optimistic.

    • Wow!! Thanks Dave for this incredible response. It’s clear you did serious research on this topic. Thank you so much for sharing this info. I agree with Tonya and think this should be sent the President and Congress, especially since they left for July vacation without looking at this matter.
      Thank you again for your wonderful insight on this; it is greatly appreciated.

  10. Student lending in the US is designed to provide incentive to the lender. If student loans for tertiary education have been created to provide a business incentive, similar to mortgages and auto loans, why shouldn’t students have the option to declare bankruptcy on loans? My understanding is that bankruptcy was once an option for indebted former students, but the abuse began to outweigh the benefit to society … or so the argument goes.

    The problem with student loans is there is no physical collateral to provide in lieu of loan default. Many countries, including developing countries, have realised this and have made adjustments to the tertiary lending process. Unfortunately, lenders in the US still wants to make money from an education that is no longer a privilege but an absolute necessity in a globally competitive economy.

  11. College used to be for the academically elite. The best and brightest. Now, anyone can get a college degree. It is basically the equivalent of a high school diploma in 1950. There is a college on every corner willing to trade you a piece of paper for a chunk of your future earnings. Many have no admissions standards at all. If your college lets in more than half the people who apply, what do you think your degree is going to be worth on the open job market? Not much. You are financially better off getting a truck driving license. (that is not hyperbole)

    Easy access to student loans is what drives the system. The more money the federal government doles out, the more colleges pop up and the prestige of the degrees gets watered down even more. If you are an average student and not real serious about your studies or have no direction in life, you are a fool for borrowing money.

    What the helpful lady who wrote this article fails to tell you is that student loans can’t really be defaulted on and they are not forgiven in bankruptcy like a home loan or credit cards. They are with you for the rest of your life either ruining your credit or garnishing your wages if you fail to pay.

    • Sometimes I wish I had just learned a trade. Financially, it’s a more sound investment, especially if you’re not attending a prestigious university (prestige/networking seems to matter more than anything else)..and I graduated in 3 years with about $12k in loans, so I made off relatively well considering. College is based off of the idea of giving people with essentially no work/life experience, assets, or substantial financial resources easy access to several thousand dollars with no forseeable way of paying it off.

      As far as the “education” aspect of college is concerned, I’m very well-respected for my knowledge/abilities/etc in certain fields, none of which I’ve taken a collegiate-level class for.

  12. I had a spouse, who was a physician, die over 5 years ago owing $100K in medical school loans. They were paid off when she passed and the federal government paid the loans in full to the lender since the loans were guaranteed by Uncle Sam. Buyer beware that when you or your child take out a student loarn guaranteed by the government the only one who wins is the lender. You are on the hook for the loan, which cannot be discharged, until the borrowere either pays it off in full or dies. The winner-the lender and the loser-the American taxpayer who else.

    • Be thankful she had government backed loans. If they were private loans they would not have been forgiven and you would have been on the hook to pay them off.

  13. Biggest mistake? Trusting GOPer legslators to hold up their end of a contract, when it might mean cash for their cash cow bankers. Second biggest mistake? Trusting “loan servicers” that actually provided no service whatever..

  14. The problem with the student loan program is misuse, for example if you walk into a expensive coffee shop by a collage you will notice a lot of people are using shiny new Mac book pro computers while talking/texting on new iphones while spending about $12 or more on their mocha frappe with the lunch special all bought with the assistance of a student loan I first became a where of this when my son got a $3000 loan and after spending about $800 on tuition he spent the rest on a camera, videogames and having a good time. After I confronted him with this his response was that everyone else was doing the same thing and not to worry since he would not have to start paying back the loan for 10 years, for my sons sake I am glad I found out the first/only time he did this. I also noted other abuses of the student loan program for example the 64 year old who commented in this article who capped out on her aggregate loan limit but expect to continue with grad plus (federal) financing for the next seven years. The student loan program should be for people who will actually be able to pay it back; not to take classes just to collect degrees to brag about over cocktails. The student loan programs should be only available help people who will enter the workforce and contribute to society. I hear about people who have a pile of student loan debt and wonder why they cannot find a job with a masters in (name a region or ethnic part of the world) “studies” The student loan program should focus on science, engineering, medical, education fields of this country not to just spend a few years in school and end up with a worthless degree.

    • ummmm ….. how about the Plan B for abused spouses who have to figure out a way to support children. I got a law degree, worked, raised two small children who have gone on to major success (one graduated from one of the most prestigious universities in the northeast and yes he got a scholarship because we were dirt poor).

      I don’t make much money b/c I am a proud public servant by choice, including wanting to have a job where I could actually be there for my children, not working 70 hours a week for a law firm that is in the business, not the profession, of practicing law. I am paying off the loans that I took out to feed my children and did not live a luxurious life, I had too defer payment to feed and clothe and house them, and the interest rate has doubled what I borrowed. And if push comes to shove, the Supreme Court has ruled that the government can take part of my social security when I’m old and wasn’t in the workforce long enough to have much (if) social security. Yay for eating cat food when I’m 80. Nah, I’m a fighter.

      Every life is fact specific. I agree there is frivolous behavior, though, but there are multiple players in this area. Maybe the brain of 18-21 year old young people just isn’t ready or trained for serious financial analysis. Good movement in Florida to introduce financial and economic education in high schools. Maybe more educated parents need to put their foot down.

      When I went to undergrad, at a prestigious private school, in the eighties tuition was $4K. I worked and paid my rent, etc. My father was able to foot the rest. It costs over a hundred thousand dollars for the same four year degree at that same university. Really?

      Don’t just slam the young folks. The private universities are out of control. And yes, I agree that young people need some guidance about degree choices in this economy. Is an 18 year old equipped to do that? Particularly those that come from families where no one has had a college degree before and those young people have a passion to try and learn how this world we live in (which isn’t in such a hot state) could possibly be more ethical.

      My daughter chose psychology (a degree people chuckle at) and now has a fellowship for a Ph.D. in a field that will pay her about $70K when she’s done. There are lots of stories about young people who majored in the non-STEM fields and things are OK.

      Education? Teachers don’t get paid very much as I think we all know.

      I don’t want to go on and on, just feel that judging someone’s life and dreams and background without personal information isn’t logical or fair. Our founding fathers were philosophers, statesmen, generally landed gentry.

      Does anyone know a young person without connections that majored in one of the ‘practical’ fields and is depressingly living at home and working at Target? I do. Engineering students used to come out of college and make good money. Not so much, not always.

      The conundrum is how to provide a good liberal arts education to produce citizens who will understand and participate in our democracy, not become consumer drones in our consumer society when no one has taught them otherwise, plus receive training in an economically viable field.

      I firmly believe the private universities that are laughing all the way to the bank and funding their football teams or their unconscionable on-line degrees bear responsibility to guide the students. The community college/trade school/skilled labor movement is a good option.

      Many children who are the first in the family to go to university have parents who want them to have that bachelor’s diploma because they think it is the only way out of the working class or their parents are working so hard or are not equipped to understand the nuances of our lovely new world. Not anymore. Not a simple subject.

      Thank you for listening. P.S. I was a math teacher before law school.

      • You are kidding yourself if you think it is the “private” schools. They provide a significant amount of the merit aid that is awarded. Public Universities are the biggest wasters. You can’t get the classes you need to graduate so it takes 6 years to do the work you should be able to do in 4.

  15. I agree that student loan costs are high and after graduating one is nable to find jobs which pay them commensrate with the cost of their education. That is acceptable or atleast understandable. My problem is the accounting for these loans. My loan balances appeared as if they were increasing while I was making payments. I stopped to check and discovered that from a beginning balance of $2058 and a payment of $29.88 (which is a credit) my ending balance is $2072. This is accounting for principal, interest not included. Now that I have questioned the calculations, they have sent me some papers with, what I will call “nonsense accounting”. No adjustment to the balance. Opening balance, (no adjustment for the payment) and the same ending balance. Go figure!

    • Exactly! I have been paying about $91/month on undergraduate student loans since 1994 – that’s approximately $19,656. However, my principal balance has only gone down about $7,000. How is that possible?
      I’ve gotten the accounting documents and it is completely nonsense! They apply miniscule amounts to the principle (average for me is about $32/month)and claim all the rest as interest. Also, they have some weird calculation methods in which they treat each disbursement – sometimes 2-3/year, depending on how they were given to me at the time from the lender – as a completely separate loan, so it is treated as though I have about 15 separate loans. This gives them the opportunity for more interest than if they were treated as one whole.
      The student loan system is a total scam! I, like many, would not have been able to attend school without this assistance, but am definitely paying now! And, I was one of the lucky ones – I think my total undergraduate loan balance was about $25,000.
      I am only now in a position to just pay the whole thing off, which I hope to do in the very near future. I anticipate a lot of shenanigans from the loan servicer – I’ve heard the horror tales from friends who wanted to pay the total balance off and had to fight the service as they added several thousand to the “pay-off” total. One last attempt to gouge the borrower out of some interest, even if there is not supposed to be any penalty for early pay-off!

  16. I’m 64 and hoping to enter a PhD program in Public Policy and Social Change. I returned to college over a decade ago and will soon have a second Masters. I’ve capped out on my aggregate loan limit but expect to continue with grad plus (federal) financing for the next seven years. I waited a long time to ‘get educated’, I feel like it’s my turn. Like my son and all his classmates in law school, I expect to consolidate and enter into a public service contract working at least 30 hours a week, probably for close to minimum wage, locally (I live in Northern VT and am a serious Greenie) for a non-profit or governmental entity. I have no delusions or interest in being a CEO or mainstream consumer. This ‘slide’ was part of the negotiations in the bank servicers’ bailout and is seldom talked about even by financial college counselors. But I guarantee it’s legit. A few other things, the recent Harvard Review has a story on prison reform stating there are more people in prison than in college. There’s an ombudsman for federal school loans but not for private student loans. Banks are basically amoral, corporations know no morality, debt is an illusion, currency has no value and the Occupy Movement has it spot on.

    • “I’m 64 and hoping to enter a PhD program in Public Policy and Social Change.”
      “I have no delusions or interest in being a CEO or mainstream consumer.”
      Translation: ‘I have no interest in being anything but living off of the rest of you.’

      • That is so unfair. But, from your comment, I don’t think anyone will ever change your point of view.

    • I strongly suggest you give up on that crazy idea of getting a Phd. As you know, many financial advisors are now suggesting getting into a certificate or credential program. The cost of a Phd is way too high for the benefits you can expect. The exception might be getting your Phd online while working full-time. A Phd is no longer needed to make money in this down economy. Having more specific skills is the way to go. I was a temporary secretary for 10 years pursuing masters degrees and I have seen the benefits of certificates vs. degrees. If you have a masters degree, which you can now get online, you can publish all you want. It is fair to say that Phd’s don’t have enough job opportunities. We’re heading toward the worst depression in American history – just read up on it!

  17. Community colleges do not offer all courses required for certain degrees. We were unaware that the ‘refunds’ the college sent was actually dollars from a student loan. Following four years of college, $25K was owed. Three years of payments and $30K is owed. SallieMae has no place to speak with someone in person – only on the phone. Four loans were consolidated without our knowledge. We have had no assistance and nothing but problems. According to them we are digging a deeper financial hole with each payment!! $300 monthly payments are a bit steep for poor people and a recent graduate.

    These loans appear on credit reports and lower the score significantly.

    We were struggling trying not to borrow money. At some point, we must have signed something not realizing it was for student loans. When the first $3500 was sent from the college, we thought it was an overpayment of some sort. The check didn’t say student loan. It was sent from the college following payment of the tuition and other required fees.

    A nightmare. A real nightmare.

    • I don’t know why someone would assume an unexpected check was “an overpayment of some sort.” I certainly would had found out the details before signing on the back of that check!

      The IRS accidently sent me a refund of approximately $40,000! I called them, found out that it was an error, and sent it back to them immediately! How many people would have just thought, looks like I won the lottery, only to have the error be caught eventually and be charged fines and interest and be on some chat board, crying that it wasn’t their fault, they didn’t know?

  18. I am nearing my 40th birthday and still owe $25K in student loans. Student loans are for life! I have always made payments on my loans, but in hindsight, I would not have gone to a private school for my graduate degree. I never thought I would still be paying my loans after I had a child. You can’t save for your child’s education when you are still paying off your education.

  19. I a struck by a thought when I ponder the debt for life aspect of student loans. You must be sure to keep all receipts and payment information and paid in full papers FOR THE REST OF YOUR LIFE. What happens if 15 years down the road a creditor comes forward and says they no longer have the records of you paying your loans and you know you did but you lost the receipts from that long ago? I’ll tell you what, you have to pay again. It is no laughing matter to imagine how ugly this could be down the road since they can even garnish your social security money to pay these debts.

    • I wouldn’t worry too much about them garnishing your social security since it will probably be long defunct by the time most people just now getting out of college retire plus, due the crappy economy, most of us will never get to actually retire. We will just work till we drop. No golden years for us. We can only hope for something better for our children and grand-children.

      • Forget them garnishing your social security… you know that nice income tax return we like to recieve after filing taxes….consider that gone if you are in default of your student loans…also they may garnish wages from your paycheck. Don’t ignore yoour student loans, the government will get there money, even if they screw you in the process.

        • Duh, it’s not a tax *return* they’ll take. It’s a tax *refund*. You FILE a return. If the IRS owes you money it’s a REFUND. DOH!

          • The IRS has advised me that it is taking my 4K refund and applying to the Department of Education defaulted loan.

  20. With a little planning most can go to college and not have to worry about loans at all! I was a stay at home mom and my husband made a decent living for us but not enough to be able to pay for college for two kids. When our kids turned 15 they knew they were expected to find a part time job and start saving because they were going to pay for one year at a local branch of a good state college. My daughter was first. She did so well with saving that she had earned and saved enough to pay for TWO years and loved the branch so much that she wanted to stay there for her second year and did. So since she did it we expected our son to follow and he to paid for two full years at the branch. When they got to the main campus we furnished beautiful apartments as rewards and I had taken on a job that we did not need the income from as we had always lived off of one paycheck. My entire check went toward rent and tuition for 6 years. While working and not bringing home a pay check for 6 years wasn’t fun, I wouldn’t change it for anything! We had kids at the main campus for almost 6 years and neither had a dime in debt when they graduated. Both had jobs on campus and paid their own utilities, put gas in their cars and bought their own groceries while they were there. To this day their proudest acomplishment is paying for that first two years of college. Being able to manage that first apartment on a part time job while going to college made them wonderful money managers. Over all the way we did college made them the responsible young adults they are today, and we couldn’t be more proud.

    • I’m great this worked out for your family and you and your kids deserve praise. However, keep in mind that is unusual and most kids/families can NOT pull off something like this, and the vast majority of middle-class college students today simply cannot get through a 4-year degree (or often even a 2-year degree) without at least some loans. One issue is that costs vary a lot from state to state. In MN, state aid to higher education has seriously lagged or actually been cut multiple times in the past 10 or 15 years. Tuition at the U. of M. runs over $12,000 per year now. Include books and other necessary fees, and even a student stays at home for “free” (if their family lives close enough), paying for two years at this school would run easily over $25,000. Let’s be serious, what are the odds of most high school students saving up $25,000 (to pay for two years of school) doing any legal part-time job while in school, especially if they are serious students and if they do any extra-curriculars at all? For that matter even saving up $12,000 or $13,000 for one year at those prices would be darn hard– a kid would have to bank at least $3,000 per year for 4 years of part-time working starting at age 15. That would be 10 hours per week at an $8/hour job devoted totally to college savings (and many of these jobs don’t even pay $8). Again, let’s be serious– extremely few people would be able to do that. Unfortunately, some level of loans are a matter of necessity for most middle-class families now. The key is picking a school that doesn’t cost so much that a student graduates with an insane loan total of $100,000 or more that might well cripple their financial future for a decade or more. If somebody gets a degree in an employable field, most young graduates can probably handle a loan total of $30,000 or $40,000 without it being a disaster, though no question it would be far preferable to have zero. I speak as a parent who got his degree long enough ago (when school was still “cheap”) that I did put myself through with part-time work and needed no loans– but the huge escalation in college costs since then make it far harder today. The older of two daughters is a junior in college now. My wife and I happen to make enough money now, and also got a moderate-sized inheritance, so that we were recently able to pay off the loans she’d taken out to help get through the first 3 years of school (along with a large package of merit-based grants and scholarships she’d gotten from her $53,000-per-year school). And for her last year we will be able to pay her net amount due out-of-pocket without any loans. But I realize that most families make less money than we do now and aren’t able to pay off school loans like that on top of all their other obligations. Right-wingers will scream in protest at this comment, but this is what happens when a wealthy society decides to go the “low tax” route and leave kids mostly on their own in paying for college, with relatively little federal and state aid and subsidies available unless a family is actually poor (i.e., income under $50,000 qualifies for a Pell grant). BTW, for anyone wondering why my daughter picked a $53,000 school– this isn’t for the purpose of bragging but just explanation– she is a very good student (3.97 high school GPA at a school where 4.0 was the top possible; 31 ACT) and plans to attend Med school. While I’m sure it’s not impossible, I think that attending community college for a year or two– as many here advise, and as I’m sure does make sense for a lot of people– makes it quite a bit tougher to gain Med school admission.

      • Most families could do this if they got their priorities in order and cut out the excess to save for college tuitions. Unfortunately most families find the here and now gratification of $4 coffee, cable tv, more car than needed, etc to be more important than their kids education.

    • A huge portion of student loan debt is interest owed to banks. You know big banks that baorrow from the government at 0.75%. They provided no service of an sort whatever for this money, aside to services to their GOPer Congressional overlords. They are vampirish leeches.

      • Poor Michael. You exhibit the typical victim mentality of many uninformed Democrat voters. Blame the GOP. Blame the banks. Blame the system. But it’s never your own fault. Right?

      • The interest that is charged is related to the risk they have to assume lending to an unproven 18 year old. It is that simple.

  21. Student loans were the best money that I ever borrowed. I got a degree and was able to get advanced degrees. I borrowed only what was required for my education and not to support a lifestyle. I owed the equivalent of one years income for a skilled carpenter when I graduated—more than the average $27,000 to $30,000 for the average student loan today— a skilled carpenter makes $40 to $50,000.
    I cannot believe all the excuses offered in this discourse for not knowing what borrowed money costs, did you not take an economics course in college?
    Borrow money to make money, do not borrow to support a lifestyle or a college you can not afford.
    Student loans at today’s interest rates and at today’s tution cost for a state university will be the best deal you will ever get.

    • Dave-

      “Borrow money to make money, do not borrow to support a lifestyle or a college you can not afford.”

      I am obtaining my doctorate degree (Yeah to be a doctor) and my school costs over $21000 per year to attend. This school is actually on the lower end of cost and some people I know are spending upwards of $30000/year to attend. Over a four to five year period, that’s over $100000 in loans. So while I’m glad you didn’t have to take out a ton of money (nor do I because I had some help @ the beginning) some of my colleagues will be over $100K in debt when graduating. That’s on TOP of any student loans from colleges (even reasonable ones).

      In addition, to obtain a doctorate degree in my field (Psychology) it is very difficult, if not IMPOSSIBLE to work while going to school. This is because students have half-time non-paid jobs in our field, called practicum (20+hours per week) that are mandatory plus full-time course loads. In response, how would ANY student be able to only borrow the minimum & not live in a box?

      I don’t mean to be dramatic but I know a number of students who aren’t going out partying or anything but need to take out loans for living + school. So that is adding at least $10K a year to their regular student loans.

      All this being said, I didn’t have to take loans @ my college (my homestate pays for students college who score certain SAT’s). I also didn’t have to take loans for the 1st two years of my graduate education. However, my circumstances have changed and now I have to take out money for both school + some rent (not all). So when all is said & done, I will be about $60K in debt for only 2 years of school.

      Also, to your argument about not taking out loans or attending schools you can’t afford- ALL graduate programs in Psychology (and many other fields such as medicine) cost much more than what students can afford with part-time work (or min wage). Keep that in mind.

      • But the real question is will your income as a psychologist be sufficient to pay for your loans? No one doubts that you can run up legitimately high loans getting an education these days.

        The issue is that many degrees are no longer worth what they cost.

        $100,000 can cost over $1000 a month for 20 years depending on what interest rate you get.

        If you’re looking at a social work type of job or some kind of internship, you may have already made a mistake. You’ll need to have your advanced degree get you at least $70,000-$100,000 to have that payment not dominate your life.

        There are a lot of engineering degrees and many medical degrees still worth that kind of investment. Not sure about psychology. Hopefully you’ve done the calculation. I’d guess few Liberal Arts degrees pay for themselves these days.

        • You are unaware of the fields in psychology that do pay well. And is it wrong to care about others these days? Oh, right, the returning veterans with PTSD, the abused children, to just name a few. So, it’s back to Adam Smith and social work is a waste? I feel like we are returning to the Dark Ages of indifference to our fellow man, sometimes, anyway, when I read some posts. Good luck to you, may hard times never come your way.

        • Taking a finance class may help provide an understanding of fiscally responsible investing and associated risks. However if you already know the risks and the return on investment and it is not favorable don’t make the investment. If you still choose to make the investment assume the responsibility of your decision.

        • Many people can’t, honestly. For some PhD programs, it only makes sense to pursue them if the student is independently wealthy and will never need this degree to make a living.

  22. How many stories are there already about parent plus loans where they develop a “very real” monthly payment plan, but the money never comes? If the loan is out in the parent’s name, they end up being responsible for it – not the student. Besides, not every parent has the credit score to get approved for a loan, much less one with a low interest rate. What happens to these parents’ would be students? As it is, governmental loans are not always enough to cover the cost of tuition. Think about it; with most college tuition between 20K and 60K, a few thousand in governmental loans barely scratches the surface. To the people who say go somewhere in your means, I completely agree. I am a student at a private liberal arts college (with good merit scholarships and need based aid). In order to attend my school, I take out slightly over $11,000 in government loans each year, and work 3 jobs while school is in session (including my work study), with one job each summer. I would work multiple jobs over the summer too, but it seems most employers within a 30 minute drive of my parent’s house aren’t interested in hiring someone who is only around 3 months of the year. Starting at a community college is a great idea too, but it only lowers costs if the price difference (factoring in necessary apartment and/or car expenses) is greater than the amount of aid you receive from a private institution fresh out of high school based on merit (which you aren’t guaranteed later). Of course this assumes you take two years at a community college and two at the other school or four years at the other school. Depending on various schools and combinations of these schools, you may or may not have to factor in a fifth year of education; changing the equation. To sum it up – remember that some students know how much they are taking out and do so anyways because it is their only chance at a college education. Why should a student’s future career opportunities be limited by what their parents can afford?

    • A persons opportunities should not be limited by what their parents can afford, but by a persons abilities and what they the individual can afford taking into account the benefits and expected income an advanced education may bring. An advanced education is not a right or guaranteed to anyone. The consequence of taking out loans and incurring obligations and debts that one cannot afford to repay, once they graduate, is potentially an adult life of scrimping, doing and going without. There are always consequences for every decision. Some good, some not so good. I hope your investment in yourself of 11K per year to finance your college education is a good one.

  23. The real issue is the cost of college. Why on earth does tuition continually go up even faster than the rate of inflation? My daughter was lucky enough to find a good grant at FindScholarshipMoney.com but otherwise we would not have been able to pay for her. She would have had no choice but to go to a state school or a community college for the first couple years. Other students aren’t so lucky. A serious effort needs to be made to control costs so college does not end up being only for the elite.

    • Its price fixing, plain and simple. If the government is willing to subsidize any loan cost then universities can endlessly raise tuition knowing the money will be delivered anyway. If they didn’t keep raising tuition they couldn’t build fancy new buildings to make room for more students and more loans. Its going to be just great hearing the explanations the government comes up with when the student loan bubble bursts and tanks the economy worse than the 2009 mortgage crisis, in five years, or less. Elizabeth Warren has a bill up to make loan interest rates for students on par with big bank loan rates, less than 1%.

  24. A possible solution, for students whose parents have equity in their homes, is for Mom and Dad to do a cash-out re-finance, pay off the student loan debt and then set up a real (monthly) payment plan for the student. The parents can borrow money at 3.5% and lend it to the student at 4.5% or 5.5%. This makes the parents more money than they’d make on CDs and lets the student borrow at a rate lower than the 6.8% Stafford.

    Another solution of course, is for students to select a college whose cost is commensurate with the student’s expected income. Teaching 2nd-graders, for instance, is a lovely occupation but a degree from The Teachers College at $60k Columbia is a luxury that anyone who takes out loans to pay for college cannot afford.

  25. I think the number one advise here on loans is to don’t get suckered into going to the most expensive school you get accepted to if you have to take out loans. It may mean going to that 25k-30k/yr school rather than the 40k-50k/yr school. As others have pointed out that is may mean taking those English, history, science, sociology, and psychology 101 classes at community college. It may mean going in state rather than out of state for the cheaper, in state rates and cheaper transportation costs getting to and from school each semester. It may mean working two jobs in the summer time to put towards tuition and a part-time 20-25 hours a week during the school year for pocket money. It may mean giving up spring break trips to Florida or Caribbean Islands or Hawaii. It may mean your first car is a small, used car rather than some fancy car with high insurance and repair bills.
    Doing such things could mean saving 10k-20k/yr on those loans and the interest that goes with it.

    • Wow, judge a little, eh? I don’t know young people who need loans who take such lavish trips. But you are correct – that is bad judgment. But we, collectively, the universities, the financial aid counselors who shove paperwork in your face when you are a starry-eyed 18 year old who believes in the future, the government (yes, these are unsecured loans, we understand, but really? How much did PRIZM or whatever cost?). A country and the associated private enterprises that do not exercise their duty to human resources and youth is just not the best way, in my opinion. I’ve lived abroad in a country like the gentleman from Europe who posted above, where health care and education were a priority and that country is doing quite well. I did not receive a free education there, but worked and took the bus. The life expectancy and satisfaction with life is higher there than it is here. Food for thought, another day.

    • If you don’t consolidate your student loans you can snowball them a la the Dave Ramsey approach. Pay the minimum on all loans except the smallest one. Put all extra cash on that smallest loan until it is paid off. Then take that monthly payment and add it to the payment on the next smallest loan until that loan is paid in full. Next tackle the loan with the highest interest as where you put the payment money for the two paid off loan payments and any extra money. You will be heartened by seeing some of the loans finished forever. You will continue to pay down individual loans with the minimum payment and then with the extra money freed up by paying off the smaller loans first. Theoretically you should pay off the highest rate loans first. But by knocking off the two smallest loans completely at the beginning, you free up monthly money quickly and get a sense of accomplishment with your progress.

      • Snowballing is something that works with revolving credit, not standard loans, since your payback amount is set on the student loans the benefit for snowballing is eliminated.

        Consolidating is beneficial for most borrows. In almost all cases the overall interest rate is reduced. Also most plans allow you to graduate you payments (pay less at the beginning more as time goes on presumably as your income increases)

        • Snowballing DOES work with standard loans, not sure if you understand the concept of snowballing. I am doing the same with my law school loans and so far have eliminated 2 since beginning in January 2013 (with 7 more to go). I have also reduced my mandatory minimum payment $200/month by eliminating the two smallest loans. I still have a long way to go, but it is very heartening to see the smaller loans paid in full.

    • Consolidation sounds great, but it generally ends up making the interest rate total higher. It may not sound like much when you are told your rate will go up, but I really DOES matter. I consolidated under the Clinton administration when rates were much higher. If you can avoid consolidation, you will probably save thousands in the end.

  26. This paragraph is just sad! {If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans is not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.} You should be paying on your loan not the interest on your loan!!!! Interest SHOULD NOT apply to student loans. And if they really expect hefty payments right after school they should only let people borrow money that have a REAL chance in the job market. NO ART SCHOOL NEED APPLY. AND I AGREE WITH J. DO NOT LIVE BEYOND YOUR MEANS. I come from a poor background with no help from family members. People with my background should get grants for techical programs or Community College. Something to get them directly into the job market. Otherwise if you don’t have help you won’t be able to do it on your own. I’m now way poorer than I started off to be bc I can’t repay my art school debt. And I can’t go back to school for a decent career bc I don’t have the money and my credit is HORRIBLE due to student loan debt. I was very stupid. Borrowing money is a bad idea the majority of the time. And I so wish I had someone tell me it was a horrible idea. To tell me NO you can’t borrow this money. But instead they kept giving me money for something that would never pay me in return. TERRIBLE.

    • And on top of that there was no help to get me back on track. Everytime I tried to defer and let them know my school was in the middle of closing and all this stuff was happening they basically said screw you we need our money. There was nothing for me to do but GIVE UP. And this was happening while I was still in school and right after.

      • Deferment and Forbearance is rarely possible and/or they try to make it really difficult for the borrower in my experience. They were needing my school to provide all this information for them when my school was in the process of closing it’s doors, therefore wasn’t possible for me to get the info they needed. >Yes I borrowed money for a school that closed it’s doors and lost accredidation.< I no longer believe in or agree with student loans, but lenders should know the graduation date and the student should not have to pay til ONE YEAR after graduation, accruing NO INTEREST. And there should be a limit to how long the person can go to school if they are borrowing money.

        • If you don’t know the difference between “its” and “it’s” you don’t deserve a college degree.

        • Dear Misty,
          Just wanted to say this because nobody else did—I really feel for you. I didn’t realize until much later in life how things like that worked either. It sucks not to have good advice. Maybe you can find someone now that you can go to and try to make a plan for how to get out of your predicament. I know it’s hard with the way the economy is right now. Wishing you the best!
          Lizzy

          • ok, here’s the thing, schools and loan companies are out to make profit, so they won’t care if you can’t pay or if your degree wasn’t enough or you quit school. So, it’s best to think of it like that unfortunately. I know, loans are an awful thing.

  27. This paragraph is just sad! {If you’re anything like me, you probably consumed your fair share of instant noodles while trying to survive on a college student’s budget. Trust me, I get it. But one thing I really regret when it comes to my student loans is not paying interest while I was in school or during my grace period. Like I said, I was far from rich, but when I was in college, I did have a work-study job and waited tables on the side. I probably could have spared a few dollars each month to pay down some student loan interest. Remember, student loans are borrowed money that you have to repay with interest and more importantly, that interest may capitalize, or be added to your total balance. My advice: Even though you don’t have to, do yourself a favor and consider paying at least some of your student loan interest while you’re in school. It will save you money in the long run.} You should be paying on your loan not the interest on your loan!!!! Interest SHOULD NOT apply to student loans. And if they really expect hefty payments right after school they should only let people borrow money that have a REAL chance in the job market. NO ART SCHOOL NEED APPLY. AND I AGREE WITH J. DO NOT LIVE BEYOND YOUR MEANS. I come from a poor background with no help from family members. People with my background should get grants for techical programs or Community College. Something to get them directly into the job market. Otherwise if you don’t have help you won’t be able to do it on your own. I’m now way poorer than I started off to be bc I can’t repay my art school debt. And I can’t go back to school for a decent career bc I don’t have the money and my credit is HORRIBLE due to student loan debt. I was very stupid. Borrowing money is a bad idea the majority of the time.

    • Interest shouldn’t be charged on student loans? What are you talking about? People should be allowed to borrow money, then pay it back over 20 years but never have to pay for that service? Unfortunately, the banks are a business. They need to make money. They are not our friends or our family, and they are not there to just do us a favor. Paying back loans really sucks, and it is sometimes ridiculous how much they want from me when I can barely live off of my entry-level job income. But hey, I chose to go to a private university, I chose to take out loans to cover the costs that were not covered by grants or scholarships, and I choose to live in this country where nothing is free.

      • Banks? It’s the fed Obama’s federal government operating the program.. They print the money for free and charge borrowers
        6-9%

        • Did Obama invent Federal student loans? It would be nice if he could get credit for making loans available to students who otherwise wouldn’t be able to sniff college, but he didn’t come up with this program. He’s trying to protect it. And I agree with the comment that there should be limits on it, though I don’t think art students should be kept from borrowing.

          • AMEN!

            signed,

            A recent grad that has her dream career partly because I was able to borrow money (no outside assistance, parents denied loans)

  28. If a community college offers courses that will transfer to your future university degree ( bachelor’s or higher), begin your college education there if you have not received substantial grants or scholarships to the college of your choice. Most degree programs have similar prerequisites for the first year or two so check out the community college. MAKE SURE you verify that those prerequisites will transfer and be counted toward your prospective university degree. If they will, you can get at least part of your education at a fraction of the cost of what it would be if all classes are taken at the university.

    • You are absolutely right! I try my hardest to convince people to take full advantage of community college benefits. I transferred the absolute maximum allowed prior to completing Arizona State Unversity undergrad studies, and had even gone back simultaneously when I found out I still needed lower level courses. I found community colleges better because:
      1.) Cheaper, meaning I had spending money left after financial aid is dispursed. At ASU I had to pay several hundred out of pocket even after financial aid dispursement. I didn’t have to pay for parking there, whereas ASU charged $400-$1000+ to park several couple blocks away in the scorching heat.
      2.) Smaller campus, meaning closer classes/parking, easier to find, and I was able to feel more involved. I participated in a few honors societies and programs, and at ASU I could hardly do that or even be invited.
      3.) Easier access to resources, meaning I could get advisement, financial aid, tutoring, rental or gym assistance much easier and faster without crazy waiting or appointment times.
      4.) Smaller classes, meaning professors are much more helpful in my experience, and some just as qualified as university professors. It also isn’t as much of a fight enrolling into courses.
      5.) Not that this is too important in my list, but I made more and closer friends at a community college than a university. I don’t entirely know why but I made a whopping 2 friends at ASU and the cc I made a whole clique.

      –Please don’t count out community colleges because you think you’re not getting quality education or it doesn’t look as good as attending a university the whole time. The end result matters, which is obtaining your degree. One of the only downsides to attending a cc for so long was my inability to increase my GPA at the university as well as it could’ve if I’d began attending the university faster. I had gotten 2 C’s at ASU and this put a dent in my GPA, so I should’ve taken a few more courses there to help bring that up. I still graduated with 3.28 but higher is always better (at the cc I got 3.69 and I’m NOT a studier). I hope this helps somebody during their exciting quest for advancement :)

      • You know what, that future employer doesn’t even have to know that you went to community college. Just give the info of the college where you received your B.A/B.S. degree, such as the year you graduated, your major and your GPA. Would only need to list the community college if there was extra curricular involvement that might be directly related to the job you are applying for…. such as working on the school newspaper and you are applying for some type of writer/editor job.

      • Brittney, when you recommend people take full advantage of community colleges, I wholeheartedly agree. But you undercut your argument by saying that you had a 3.69 at CC without serious studying and couldn’t match those grades at the university. You say that only getting the degree matters, not the actual education, but I don’t agree. If you don’t value the actual education, then you don’t deserve that diploma.

  29. This isn’t really an article for the borrower, although it is presented like one. This is a message from your lender about how you can make their job easier, how you pay them back most effectively, and how you can be sure they know where you are at all times.

    The four real points should be something like:
    1) Don’t borrow money. Go to a cheaper school. Reduce your lifestyle (split an apartment–again, sell the car, get a bike, cancel cable, etc.).
    2) Borrow money from family at a flat rate. Help family understand that student loans are designed to make money for the banks–that is why banks exist. These loans follow you forever and are not “a cheap loan” because of things like capitalizing interest and repayment schedules that ensure the interest is paid first. Once your family sees how you have cut back (see item 1), they may be more willing to invest in your future–because you are making hard choices too.
    3) If you must borrow money from a student loan lender, borrow as little as absolutely possible. Don’t use it to go to Europe. Don’t use it to maintain lifestyle. Don’t give it to your boyfriend for his education.
    4) Let the bills go to your parent’s house (especially if they are in a stable home). In your first few years out of school, you may move around a lot. If the bills go to one secure place, you have a better chance of actually getting them and not accidentally falling delinquent. Encourage your parents to open them and tell you what they say. That way, they too will know what you face as you start out in life. They may find ways to help you.

    Good luck. I am 15 years out of school and I still have 10 more years to pay–though I am planning to pay down sooner.

    • “Borrow money from family at a flat rate.”

      You live in a naive fantasyland if you think most students have this option.

      -a recent grad

    • It seems as though your tips have gotten you a 25 year plan to pay off your loans. I hope no one takes your advice to heart and winds up in the same boat.

      • Nearly everyone is put on a 25-year payoff plan, particularly under consolidation. To me, the advice reads more like what J wishes he/she had done or been able to do. The advice is sound–for those who have the option(s). Unfortunately, those who are not mature enough to understand what they are signing up for when it comes to financing their educations are often not mature enough to pay off a loan from a family member. I know I wasn’t mature enough on either count back when I was signing up for decades of debt.

    • Yeah, I agree, that article didn’t tell anyone anything new–just how to co-operate with the vultures. Thanks for your advice too.

  30. Never consolidate your student loans, there are state and federal. Pay off is quicker and you save on intrest over time.

  31. ED is still pretending like the $1 TRILLION boat anchor around the middle class in the form of non-dischargeable student debt is solely the students’ fault. Nevermind that ED is a revolving door with the banking, collections, and student loan industry. Google Matteo Fontana or Theresa Shaw. Better yet, Google the story of unsung hero and former ED staffer Jon Oberg.

    The cesspool of corruption, graft, and greed that is the US student loan system is a national disgrace.

  32. I am going to try to pass these two classes that i have and do the best that i can.

    Thank you.

  33. You should have got grants or scholarship
    . Only taken enough classes your grant
    would cover . A little at a time .

    • Frances,
      Not everyone is eligible for grants and scholarships. And even if they are, many require that you are a full time student in order to receive the funds.

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