Fruzsina Eordogh, an English major, borrowed $43,000 from Sallie Mae, with an average interest rate of 9.5%. She has already accrued $22,525 in interest, and the total amount to be paid following the recommended payment plans will be $123,350 with monthly payments of $690 for 14 years and 11 months.
I hope those figures shock everyone reading this, whether you are a parent or a young person. College and student loans are pushed as the solution to your future, when in reality the loans often create economic slavery.
I have a daughter that graduated from college two years ago, a second daughter that will graduate this spring, and a third daughter who is earning college credit while a high school junior, so our family has been very conscious of the expense of college and looked for ways to minimize it.
My oldest daughter was involved in a work-study program, working in a hospital and had half her tuition paid. My middle daughter chose to attend a local community college and benefited from the drastically lower tuition rates. My youngest is following the techniques recommended by College Plus and nearly has half her college credit earned already through CLEP tests. She will complete her bachelor’s degree through online college courses at Thomas Edison State College.
Those are just a few alternatives to the traditional on-campus full-time college high-price-tag track. For that matter, please consider whether a college degree is even necessary. For example rather than spending $100,000 to send your child to a private college to earn a multi-media degree, that money could purchase a lot of multimedia equipment and software as well as one-on-one tutoring with a professional in the field. My area of expertise is computers – programming and web design. The same approach could be taken there. I recently looked at the computer curriculum for a four year college program and felt that it was woefully inadequate to prepare someone for actual work in the computer field. Some careers will require a college degree, but many might not. Be willing to look for alternatives to accomplish the same or better results.
The average undergraduate student graduates with close to $20,000 in student loan debt, a 108% increase in the last decade. The biggest borrowers of all are law students and medical students, with close to $100,000 in student loans.
Fruzsina suggests that part of the problem was that Obama was not willing to forgive private loan debt or that private loans should be regulated or banned. Personally I don’t think the government needs to be involved at all. Forgiving someone’s student loan only means that someone else, taxpayers like you and me, will be paying that debt.
The answer is to be aware of what exactly it means to borrow $43,000 or more in student loans, preferably before you sign the papers. If you can’t see how you will be able to repay that much money, don’t borrow it! The selling point in the past was always how much more you would earn with a college degree. How much more would you have to earn to offset those student loan payments and interest? Is it really worth it? And even with a college degree, in the current economic decline, you are not guaranteed a job.
Don’t get me wrong, I am totally in favor of education. I just think colleges have become far too expensive and that there are viable, affordable alternatives to obtaining an education.
Fruzsina’s article
Into whose hands are you trusting your children’s lives?
