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Call it a reverse dowry: college debt diverts careers and delays or impedes graduates' plans to get married, buy a home or even to start a family. The effects can last years.</p>
<p>A 22-year old student graduating this year who consolidates their $40,000 loan at 6.125 percent will need to pay $243 a month...until they're 52. By that time, they will have paid $47,494 in interest alone.
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<p>No student loans! However, I did have $1000 in loans when I graduated in the pre-Cambrian era (equivalent to $5,419.62 today) and that loan saved my enrollment. That was not too bad to pay off. But the loans being contemplated today are unbelievable.</p>
<p>Is not Education an investment of time and effort for the future? </p>
<p>I wonder why people are so concerned with their educational costs when they will later buy a house of $X00,000 on a 30 year loan and then refinance that mortgage or move to another house every seven years, paying another 3-7% in new closing costs on top of paying the RE agent. </p>
<p>The only reason that I can think that people feel uncomfortable in being in debt for education is that they "Think" that what they learn or not learn is of little ultimate value.</p>
<p>I think the point is that you can not buy a house without a loan, but you can probably get a good education without a lot of debt. Not only that but people who are "house poor" are pretty strapped and unhappy too.</p>
<p>People squirm at home prices too. They want a great community, good schools, and want to buy low and sell high. They also must live somewhere. They could throw their money out monthly in rent, or purchase and get every nickel back when they sell, and hopefully find a windfall of profit if they chose well, and got lucky.</p>
<p>People can live in a house without a loan. It's called renting. Most people grossly overestimate the rate at which their home equity will increase if they take out a mortgage (not to mention underestimating the risk of a fall in house prices in their market), and underestimate the return on good-quality higher education.</p>
<p>"We've never done this to a generation of young people before," said Dr. Heather Boushey, Senior Economist at the progressive Center for Economic and Policy Research. "We've never put a generation in their 20s in debt they can't get out of before they started their work life."</p>
<p>This is pure BS. "We", whoever we is, have not done this to todays graduates. Students and their families have chosen this alternative. And with grads of public and private colleges graduating with an average debt of $15k/$24k respectively, is it that much more than we faced as graduates so long ago?</p>
<p>My wife graduated in 1972 with a student loans totalling $5500, not to much, no? Well that was $26,171.05 in today's dollars. I was a graduate student with a monthly $300 cash stipend which we(yes, we cohabitated before marrying-oh the shame) used to pay the rent and food. She worked in the data processing department of a regional bank making a wee bit more than $6000. My loans totalled $2100($9992.58 in 2006 dollars). We managed to pay off our $7600($36163.63) student loans in less than 5 years. Our income to loan ratio was 1.28:1. For two college grads today earning a total of $70,000/yr the average income to loan ratio would be 4.67:1 and 2.80:1 for public and private college grads. </p>
<p>And the author's statement that burdensome student loans make it harder for grads to marry?? Come on! Get married to your sweetie and you roughly double your family income and have a permanent roomie to share living costs with.</p>
<p>I'm also concerned about the next generation! If students take out such high education loans AND try to pay off home mortages when young, how can they possibly save for their childrens' college education ?</p>
<p>kjo, that is absolutely right. Wages are not in line with expenses. Also, when social security is wiped out, parents who have not saved, and put themselves into great debt to send their kids to college, will end up relying on their kids as a means of support. These kids will be squeezed. Also, seniors keep living longer, and they require retirement homes and nursing home care. Have you looked at the cost? If there is no long term insurance in place, then there is another huge financial burden, one that makes college look like the biggest bargain!</p>
<p>you know what is a life sentence?
When students are not given the support either financially or academically to continue their education after high school. When they feel that they are stuck in dead end jobs, and have to scrape to get by, perhaps working 2 or more part time jobs, that don't have benefits that many of us count on, like health care, and paid vacations.
Not seeing any way out, * that* is a life sentence.</p>
<p>Marite, thank you for posting that!</p>
<p>My HUGE problem with the excerpt posted is that whoever spends 30 years paying off a (relatively small*) loan is a moron. "Ooohhh... that person will be 52 by the time they are done paying it off, and will have paid a zillion dollars in interest!" Pure b.s. Many federal loans HAVE to be paid back in 20 years, max. I believe that some loans are 10 year ones. </p>
<p>If you choose to spend 30 years paying off your loans, that's your own problem. It's like paying only the minimums on your credit card every month. No one is requiring that hypothetical student to spend 30 years repaying the loans. Anyone who passed precalculus knows that you don't reduce your payments by a factor of three when you extend your loans out that long; you reduce them by less than half. The rest is all interest.</p>
<p>It upsets me because that kind of attitude (that you can/should spend your entire adult life paying off loans) is out there and doesn't make sense. It's also upsetting because it makes a student in that situation less sympathetic - it's hard to feel badly for someone who can't bother to calculate her various loan payments and total interest. </p>
<p>Anyway... rant over. :) </p>
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<p>*By "relatively small," I mean something that could be paid off in a year or two with a second job - doing something like waiting tables at night. You could live with the 'rents for a year, put all your cash towards that loan, and be done. $40,000 can't buy you a house in any part of the country; it's not even a down payment in some areas. Mortgages over 30 years - fine. But student loans? Especially a loan that can be serviced relatively easily?</p>
<p>No wonder I don't buy magazines anymore. Thirty years from now $300/month will be a joke.</p>