Is This A Good Way To Get INTO Debt?

@pyewacket (44036)
United States
July 11, 2008 7:47pm CST
For sometime now, I've been seeing this add on TV from Chase Bank how a student can get a loan from their to pay for all their college costs, especially tuition, and the loan can be as high as $40,000 PER YEAR. Now folks wonder why they get into debt...I mean isn't this a disaster in the making for someone who in a sense is just starting out in life? No doubt a person who can get such a hefty loan has certain qualifications to get such a loan in the first place. But think of it. Here a student gets a loan per year. Once the person graduates then he/she is naturally expected to pay it back and yes, of course not all at once, but in installments. But even when the student graduates, it does takes time to land a good paying steady job. Like how the frick is that newly graduated student going to pay off such a hefty loan??...Just suppose that student got $40,000 per year times four..that $160,000..I means cripes..most people don't even have that kind of credit card debt to pay off? I really count my blessings. Back when I went to college (uh, in the civil war days..LOL) I qualified for the BEOG ...basic educational opportunity grant...which meant I didn't have to pay a cent back save the small loan I DID have to get for the very last term and that was $1,000 and yes, I WAS able to pay that back...but paying back $1,000 is sure a lot different than $160,000 If you went to college...how did you finance your college bills/tuition? If you are PRESENTLY in college how do you manage your costs?...did you take out a loan, get a grant, work for it..just curious. I just think that I feel sorry for new college students that might be enticed to get hefty loans to pay for their costs, not realizing maybe the implications of that yes, they are going to have to pay that loan back.
9 people like this
31 responses
@Aussies2007 (5339)
• Australia
12 Jul 08
We had this system in Australia for at least 10 years. But here it is better manage. It is the government which lend them the money. And as soon as they graduate and start working... the government takes a portion of their salary each month to repay that debt. It is not a matter of saying "how am I going to repay it?" The government just take it... the same way that it takes its taxes out of your pay packet. They take the alimony for your wife and children that way too if you are divorce. The government controls all your money these days if you work for a boss.
1 person likes this
@pyewacket (44036)
• United States
15 Jul 08
Is that a better system then? Or worse? When my folks got divorced my mother was advised neither to go for alimony nor get child support as according to her, whether it was true or not since she would say anything and everything bad about my father, that he'd be a deadbeat and not pay either, especially the child support. Taking money automatically would solve the problem of a lot of child support situations though
• Australia
16 Jul 08
It is a good system from a legal point of view... because they cannot be any dispute or argument about it. The only ones who don't like it are the men who see the money taken from their pay packet and given to their ex-wife. But the way the government sees it... if the ex-husband don't support his wife and children... the government will have to support his family through welfare... while the ex-husband gets rich. That is why they introduced the system. Of course... there are still loopholes. The ex-husband can stop working... or work for cash in the black economy. I even know someone who formed his own company and did not pay himself a salary... so that his wife got nothing. But he had a good reason. He had his own house fully paid up when he married her... she divorced him after 5 years and took half of the house and most of the furnitures. And they only had one child together. There is no doubt that there are still many men out there who get a very raw deal from the law when it comes to divorce. There is no harsher penalty in life than the fine you get for divorcing your wife.
1 person likes this
@pyewacket (44036)
• United States
17 Jul 08
LOL--well at least most men don't have to contend with a real blood sucker for an ex-wife...uh, does Heather Mills ring a bell?
@sedel1027 (17854)
• United States
18 Jul 08
Well I have $38K in loan debt, I can't afford the payments and guess what - no 4 year degree. I am trying to go back to school this fall to finish up. I am hoping to scoot by just using my Pell Grant. I have so many friends who had to drop out because they ran out of grant and federal loan money and couldn't get a personal loan, so they are stuck in an okay job that provides for them but can't afford the loan payments.
1 person likes this
@Debs_place (10525)
• United States
17 Jul 08
If kids get financial aid and they still have things like BEOG and TAP and they are smart they can get this money which is at a low interest rate or even 0 interest while they are in school and invest it wisely. They maybe able to graduate with all of the money they borrowed plus a return on their investment. They could pay the loan back right away or use some of the money to help them get established in the world. If they want 40K for Florida trips and BMW...well that is stupid.
1 person likes this
@pyewacket (44036)
• United States
28 Jul 08
As far as I know, BEOG and TAP no longer exists....there might be something like the equivalent of it now, but wouldn't know...all I know is, is that I think when I went to college it was the right time to do so, since I had those financial aids available to me then. I DO sometimes wonder what some of my classmates did though...they must have gotten loans...cause next thing you know, I'm hearing how they might be taking a trip to England or France or somewhere else..like HUH?
@Debs_place (10525)
• United States
28 Jul 08
It appears that now there is PELL and SEOG grants. SO there is still financial aid. I remember a few years ago, I had some college student coming to my house selling magazine subscriptions so she could afford to go to Florida on her spring break. I explained to her, that I was working FT, was a Mom and was in school 1/2 time and there was no way I had time or money to read magazines. And I felt that spring break was more a way to get in trouble then be part of the educational process. I could not feel sorry for her at all.
1 person likes this
@winterose (39918)
• Canada
15 Jul 08
Yes I certainly agree, I was in university for 6 years, I was a single parent and had no income, I got a bursary for school books which came to about 2000 a year that was free but I had to live on a loan to support myself and my child and that was not free, the result of all that is that I am disabled, unable to work in my profession and I owe the government 60,000 and rising with interest every year that I will never pay back.
1 person likes this
• United States
15 Jul 08
My sister had to get student loans though they weren't nearly as much as those. They get really good interest rates and payment amounts too which is great. And I think they get to claim the amount they pay on there taxes but I'm not certain. I think the only way I would take that much is if I was going to be something that paid well and was easy to get straight into. A lot of students do it though to buy cars and take car of their rent for the year (if they don't live on campus) so they don't have to worry about working and can focus on studying. I can understand that too. I guess they think that paying for it later is a good pay off to make sure they learn as much as they can. It really sucks that we are the land of the free but it's hard for us to pay for school. *sighs*
1 person likes this
@pyewacket (44036)
• United States
28 Jul 08
I really feel sorry for a lot of kids that perhaps yearn to go to an Ivy League school..lets face it...having a diploma from a Harvard or Yale DOES look great and could probably guarantee a great job later on in life .But for most of the kids they'll opt for the cheaper, lower tuition city or state run colleges..like mine was...Queens College of the City University Of NY
1 person likes this
• United States
2 Aug 08
That is so true! I'm sure there are kids that get accepted to those schools but can't come up with the money. That sucks.
1 person likes this
@AmbiePam (50099)
• United States
13 Jul 08
I have seen that commercial so many times. It irks me. They always say, remember you don't have to pay a dime until you graduate. Guess what guys? Those years go by faster than you think! I got a couple pell grants, some student loans, and for a while I paid my own way. I am only taking one correspondence course right now, and my parents outright paid that. It's more expensive than a public university or college. I go to a Christian college. I've taken classes at secular colleges too, but my primary degree is from a Christian college. They don't have public funding, so their tuition is higher.
1 person likes this
@AmbiePam (50099)
• United States
16 Jul 08
No, not with my correspondence course. My parents paid for it outright, and it was the same price as it would have been had I taken 4 more at the same time.
1 person likes this
@Lakota12 (42684)
• United States
12 Jul 08
never went to colege never wanted too. I di dgo to welding school and paid each week a certain amount like a copay for it!
1 person likes this
@pyewacket (44036)
• United States
16 Jul 08
Do you still use your welding skills?
@Lakota12 (42684)
• United States
16 Jul 08
yes this is something ya dont forget but I havent used them for a long time
1 person likes this
@jerzgirl (8030)
• Gloucester City, New Jersey
12 Jul 08
WOW - Basic Equal Opportunity Grant. It's been EONS since that thing was around!! And, dang it all - I NEVER qualified. I might be done by now if I had. But, later, once on my own, I did qualify for the PELL grant that replaced the BEOG. The schools I attended later had low enough tuition that the PELL paid in full with money left for books. My problem was I wanted some more money to pay off bills, etc, so I took out a small student loan. All tolled, I might have borrowed $6,000. But, I haven't worked steady since I stopped working - 3 years here, 3 years there, gaps of unemployment and temping in between. My loan debt is now over $20,000 and I STILL have no degree!! And, I'm unemployed yet again. But, the loan process is this - you have six months before your first payment is due to find a job. If you don't find a job, you can defer. I think you get something like 4-5 deferrals and then you have to start paying. But, you also have an equal number of forbearances if finances are in a bind. There are also refinancing options that give you new deferrals and forbearances to use. It's a very easy trap to fall into as the interest continues to build while you're putting off payments (for perhaps very legitimate reasons). But, I know someone who took out something like $70,000 because he wanted to live and spend like he came from money (which is what he would tell people) and now he's having to pay that back at far higher payment amounts than he would have if he'd only borrowed what he needed and not what he wanted to spend. I think the government is to blame in part because they have set qualifiers for these loans and it doesn't matter what the actual costs for that particular school are. It is ASSUMED that costs are "X" dollars and living expenses are "Y" dollars and transportation costs are "Z" dollars even if the kid lives at home with Mom and Dad and can walk. It makes it VERY easy to get into debt because they don't actually look at what the true costs for that person are. Anyway, I need to get to bed.
@jerzgirl (8030)
• Gloucester City, New Jersey
12 Jul 08
Make that stopped going to school - not stopped working. I only one time stopped working voluntarily and that was to GO to school. Ever since, I've tried to work.
1 person likes this
@pyewacket (44036)
• United States
16 Jul 08
Yup...BEOG...showing my age there..LOL. I went to a City University college (Queens) and back then they really didn't have tuition, just a college fee, which by today's standards would almost be laughable as it was about $150 a term...it wasn't until the very last term I was going that is when they slapped tuition and was now looking at about $900 just for the term...but still reasonable when you think of it...have no idea if it's gone up since then..probably. I bet that person who took out $70,000 is kicking himself now though for wanting to show off like he was a rich folk and now is paying the piper..LOL
@GardenGerty (102534)
• United States
12 Jul 08
I had scholarships, grants, and loans, but only went two years. Ended up about $2500 in debt, private college, over thirty years ago. It was okay. My son had loans, paid them off himself, only went one year.State University. He was going for the wrong reasons and knew it. He also tried a correspondence course, for about the same amount of indebtedness. We paid what we could when he was in school, that was the year his dad was dying. He did not want to learn the way colleges want to teach. My daughter went for five and a half years, same Christian college I went to. Actually six years, but only half time her senior year in High School Graduated High School with a full semester credits, paid as she went. She had a little help from money I saved from her dad's Social Security while she was still in High School. She had scholarships, grants, loans and did one year of Ameriquest, or whatever it is called, community service, that knocked $1000 off. She and her hubby are paying off the loans. She took an extra year of just things she wanted to do because hubby was three years behind her.So they have quite a steep bill, but she is still able to stay home with the grandbaby.
@pyewacket (44036)
• United States
16 Jul 08
I wonder...this was back in my time too...are there such things as work/study programs? A lot of students did that when I went to college. My college was the City University system...so a LOT cheaper than a private college. We didn't even have a "formal" tuition save for the very last term I went...which was why I had to get that $1,000 loan
1 person likes this
@GardenGerty (102534)
• United States
16 Jul 08
I was in a federal work/study plan, myself. Of course we did not have the Ameriquest or whatever that my daughter was able to do after college.
1 person likes this
@owlwings (39753)
• Cambridge, England
12 Jul 08
I don't know how it works in the US but in the UK it would be impossible for most people to even consider a University Education without a loan. A degree course is usually 3 years here, sometimes 4, and, even though there are grants available, most students these days end up with a loan of somewhere around £40,000 ($80,000) to pay off. These are protected loans, however, and there is no interest to pay at all until the student is earning more than a certain amount, so they are a very good deal indeed. Don't forget that the cost of living (and salaries) were less when you left university, so $1000 then would be equivalent to two or three times that much (at least) today. It's a hard burden, I agree, but then a degree is worth quite a bit in terms of salary and if the loan is largely free, then it's a pretty good investment.
@pyewacket (44036)
• United States
12 Jul 08
To tell you the truth I have no idea how the "system" works now as far as students trying to get money for college, but yes with the drastic rise in costs for colleges/universities now it would be impossible to get into them without some kind of loan...the costs WERE a lot cheaper in my day, and we're talking about more than thirty years ago
• Philippines
12 Jul 08
I also don't know how it works there in the u.s. coz here in our country, its that so impossible that u can offer a loan to a student. You will pass through a horrible credit investigation to get a loan, and one thing student can't passed that. By the way im in the Philippines
2 people like this
@littleowl (7157)
21 Jul 08
Hi Pye I do know about this as it happens here in the UK too-I think it is disgusting as the students for one will spend it on other things too am I glad that in my day like you that grants were around and they should be today if a student is to get good education cos what if they flunk college and still have to pay it back? Especially if their job is either low paid or they end up on benefits??? It is also known here in the UK that a lot of students DO eat dog,cat food or anything that comes out of a can cos its cheap rather than being able to have a good healthy meal-how does the government close thir eyes to these situations too?? its all wrong bb littleowl
1 person likes this
@pyewacket (44036)
• United States
28 Jul 08
It's really a shame isn't it how kids can be suckered into getting these loans in the first place and I bet they just don't plain sit down and really think things out of the consequences later on.
@Hatley (164485)
• Garden Grove, California
12 Jul 08
pyewacket many years ago I was also on th Beog and did not have to pay back but about two thousand which I did get paid off, not like now days when the cost is so stupendous. It willbe so hard for these new students to pay back big loans like that.
1 person likes this
@pyewacket (44036)
• United States
17 Jul 08
Besides that BEOG I got, I did have a small loan of $1,000...thank goodness as that was doable and was able to pay it back...I feel real sorry for kids that have really large loans to pay back
@Katlady2 (9920)
• United States
12 Jul 08
I don't think students realize the aftermath of acquiring such a debt. All they can see is the dollar signs. I never got a loan of any kind. Of course I only went to a junior college, and back then the cost wasn't so high. But at the same time that I was going to college, I was also working two jobs. So I really didn't need to get a loan. I wouldn't want to take on that debt at all.
1 person likes this
@pyewacket (44036)
• United States
17 Jul 08
Yes I don't think kids who take out extensive loans like that realize the implications of the aftermath and then realize they are going to be swimming in debt after they graduated
@Aurone (4758)
• United States
12 Jul 08
Thats why its better to get a loan from the government for school rather than a bank like chase. My husband and I both have federal student loans. They give you six months to get a job and it has a low interest as well. I have been paying back my loan and I am about half way there.
1 person likes this
@pyewacket (44036)
• United States
17 Jul 08
I bet it will be a real sigh of relief for you when you're finally finished paying back that loan.
@kgwat70 (13396)
• United States
12 Jul 08
It is ashame that people are getting into such debt at an early age, especially now with the rising costs of education and everything else. They are being given loans with high interests rates or offered high interest credit cards to finance their education. The cost of schooling when I was in school was not as high as it is now so my parents were able to pay for my education without taking a loan. If I was in school, I would have to pay for it myself or through a loan. There has to be a better way to put kids through school without putting them into financial hardships right away.
@pyewacket (44036)
• United States
17 Jul 08
I was so lucky myself when I went to college, but then too college costs weren't nearly as much as they are now. I don't think a lot of college students really realize the implications of getting those loans out, to then bingo realize they have to pay them back
• United States
12 Jul 08
I got scholarships both from school and outside of school, took ap and college courses in High school and grants. I still had to take out loans however because of housing. I'm currently going to Graduate school. I didn't take out any private loans because at least with the government loans you can most of the time keep them at a low interest rate. I think having that much loan debt (especially if folks have other debts along with it as well ex. Credit cards) is bad because you then become desperate and have to take a job you don't like or stay at a job you don't like longer for the income. My first job, which I started out liking (In tech support) turned ugly midway through but I stayed longer than I should of to make sure I took care of my financial responsibilities. I should be done with all my debt by the end of the year, but it's rough, especially in the current financial situation in regards to finding jobs. I think it just perpetuates a new version of indentured servitude with folks being beholden to debt for long periods of time. I mean school is an investment but at what cost, not just money but your life, holding off things (like buying dwellings, getting married, having kids etc)? Sorry for it being a long response but its a topic that has a red flag response in me.
@pyewacket (44036)
• United States
17 Jul 08
I think that's what is the most misleading of all, that once a student graduate from college they are going to land in a good job (and one they like) right away. I'm glad to hear you'll be out of your own debt by the end of the year...that must be like a sigh of relief for you
• China
12 Jul 08
I am wondering what is yr topic at all. I don't catch the point, but anyway, it's sth about the credit loans. As a matter of fact, it's really complicated process to get a loan as a college student and you have to go through a lot of paperwork, to fill in a lot of forms very carefully, about contacts with the banks. And you also have to submit some documents from yr local government to approve yr ecnomic status that qualifies you to have the loan with low interests. And what i really wanna say is about credit card. To my surprising, some of my friends still refuse to make use of credit cards, you know, the kind of cards that allows you to overcharge. I really think it's a convenient way when we don't have enough money to spend.
1 person likes this
@pyewacket (44036)
• United States
16 Jul 08
The point of the topic is really simple here. That is, if aspiring college students really realize what they are getting themselves into by getting large student loans...almost like an "easy" fix to allow them to get a college education, then not really realizing the implications of what it means until after they graduate and they are faced with debt up to their eyeballs.
@irishidid (8734)
• United States
12 Jul 08
Unfortunately with the rising costs of everything a loan may be the only way to go these days.
1 person likes this
@pyewacket (44036)
• United States
16 Jul 08
It sucks though how people can get themselves into such high debt though...between college costs, credit cards and mortgages
• United States
12 Jul 08
You were extremely fortunate to have gotten an education at such a small cost to you. However, these days, few people are lucky enough to be in that situation. Most people graduate with fairly sizeable debt (especially if they went to a private college). Add additional years spent in a professions/masters/doctorate program. Now, you are talking some serious money-- the sort that could buy a house or three. Factor in high interest rates courtesy of the company that bought up your loan. Now, you are looking at so much debt that you will probably have grandchildren before it is all paid off.
@pyewacket (44036)
• United States
16 Jul 08
Well lets face it school costs were a lot cheaper then when I went...I bet even an Ivy League college like Harvard was cheaper then too...we're talking about thirty years ago..so costs have changed dramatically.
@gemini_rose (16194)
12 Jul 08
Well when I went to college it was through work and I would get day release from work once a week to go and learn and work paid for it. So I never ever had to have a college loan. I think that it is a bad start to a young persons life to have to have debts, all because they have wanted to make something of themselves in order to have a good career. It is probably why a lot of them do not bother because they do not see the point of getting into debt.
1 person likes this
@pyewacket (44036)
• United States
16 Jul 08
Sounds like you had the work/study type program...we used to have that..not sure if that is still available here now. I just thank my lucky stars I did have that BEOG grant thing...otherwise I don't think I could have gone to college at all