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Monday, April 6, 2009

Stimulating student loan debt. . . .

Although generally I attempt to deny the existence of my student loan debt (approaching $60,000), every once in awhile I'll come across an interesting article or opinion piece by or about another Sallie Mae serf. This CNN piece was written by a new college graduate, named Samantha Hillstrom, who now works as a production assistant for CNN.

The title, Student Loan Nightmare: Help Wanted was initially very intriguing. My student loan debt seems to pop up in my nightmares more often than I'd like, and I'd also like some help! The article seemed to be going in the direction of wondering why it is that homeowners are receiving the lions' share of stimulus assistance. This is something I've often wondered myself---if thousands of student loan debtors had some or all of their loan balances forgiven, just think of all that extra money that would go directly into the economy (or in my case, into my savings accounts. . .) Wouldn't that have the effect of stimulating the economy?

Unfortunately, as I continued reading the CNN article, I noticed that the author---rather than focusing on what she could do to encourage lawmakers to throw some stimulus money her way---fell back on moaning about how much money she owes ($115,000) due to her private university degree (in New York City, no less), and how 'uneducated' she was when she signed the paperwork on those loans.

Samantha says:

"Some might say, “Sam, you shouldn’t have gone to a private school in New York City if you wouldn’t be able to pay it off.” Well, I made a lot of mistakes when signing up for my loans, but I was uneducated on the process and on the repayment and now I’m stuck."
(Snarky note: for $115,000, I would expect Samantha to be a better writer, but that's neither here nor there).

I have to say, as someone who owes a seemingly ginormous amount of money to the U.S. government, with only a very small chance of making more than $60,000 a year in my field (I'm not even close to that now), I can relate to Samantha's pain. And I do believe our economy would benefit from a little student loan forgiveness (to err is human, to forgive is divine, right)?

But that might be where the similarities between Samantha and me end. I don't blame anyone other than myself for the mistakes that I made when signing away my life to Sallie Mae. I decided not to consider what my life after graduation would be like, with $50K in debt (the amount as grown over the years rather than decreasing, as you can see). I made that choice.

To sit around and whine about it now makes absolutely no sense to me whatsoever. Also, while I would love a little student loan stimulus, I really don't think other people should have to pay higher taxes to cover for my mistakes.

Samantha asks:
"I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?"
Well, actually Samantha, the answer to that question is YES. So suck it up and join the club. And maybe consider moving out of pricey Manhattan to someplace like Dubuque, Iowa so you can afford the rent AND your student loan payments.

7 comments:

Erin said...

Thank you! As a parent of an 18-year old in college getting more student loans than his mother would like and a woman who had $4000 in student loan debt 25 years ago (it was a lot for me, I tell you!), I agree. No one made me borrow money, and no one is making my son borrow money...he's doing it despite our entreaties for him to do something different (like live at home instead of in the dorms $9000/year in loans just for that). So, when it is all said and done, I have compassion, but I won't fix this for him. We have the power to choose and, as you pointed out, the author of that article chose her current circumstances. Now she needs to deal with them like an adult rather than a child who is waiting for someone else to come fix it for her.

Dina said...

Well said!! I wish more people would realize that they need to face the consequences to their actions rather than whining, feeling entitled to things, and blaming other people when it doesn't go the way they wanted.

Anonymous said...

The gov't chooses to help homeowners so as to keep them in their home. Homeownership is good for society and the economy. Thus, that is where the gov't allocates dollars. While education is good, you already have it. All that's left is to pay the bill. You won't lose your education or even your degree if you default, unlike what happens in home ownership when you default on your mortgage. Not everyone with debt should be bailed out. Where do you think the bail out money comes from? (hint, you, me, your neighbor, your employer...in sum, taxpayers). We are bailing each other out. Let's do it wisely so as to get the most benefit for our dollars. I don't want to pay your bills.

Lucy Grey said...

I agree. It's all about choice. No one forced us to go to this school or that. We chose it and chose the way we'll finance it. We have to pay it back.

Great post!

Fit Wallet said...

Yep. I'm in the same club. I took out $36k in student loans to finance half my graduate education in...(wait for it)...social work! I had absolutely no concept of how much money that was, or how much it would screw with my budget. At the time, I didn't even HAVE a budget. My starting salary as a newly-minted MSW was less than I owed in student loans. Suddenly, I realized how much it was going to suck to pay $215 every month for 20 years, when I was bringing home $850 a month. Luckily my income has increased since then, but I would be lucky to make $60k in this profession, too.

But I'm not whining about it. I made those stupid mistakes, and now I'm paying for it. That's how life works. You learn from mistakes and clean up the mess yourself.

Anonymous said...

I just heard her story on CNN, and I can't believe that she wants Goverment help, when she didn't take it in the first place. Every undergrad student can take 3,500 to 5,500 a year in Federal Unsubsidized Stafford loans with a fixed interest rate at about 6%. Also, her parent(s)could have chosen to borrow a Federal Parent PLUS loan for the remaining dollars she needed. She didn't file a FAFSA, and she didn't borrow federal loans, even though these programs were available to her. Every student should complete a FAFSA, make a budget, and do a cost benefit analysis before borrowing. If she had borrowed the federal loans that were available to her, she could have significantly reduced if not eliminated the need for private loans, and she would now have 5 repayment plan options stretching out as long as 25 years. There is even a particular plan where your monthly payment is based on your income. I am really taken aback that in all of the comments on her blog, no one is saying, "Why didn't you take the help the government offered you at the beginning?"

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