<p>" So, at the rate you’re paying, are you making any dent in the principal? Is the balance actually rising because you’re making such small payments? Do you have a plan to pay off the loans? " No dent in principal… the plan that I enrolled in is only a bandaid until I am in a better position to put more money on the loans. Luckily, this plan is allowing the principal to remain flat. The interim interest rate is zero percent. I actually need to call them this month to see if they can extend the plan another year. What I have learned is that if you are proactive with student loan creditors and servicing companies, they will do everything they can to help you. It is only when people stop paying and go into default that they become your worst enemy. Right now, they are my best friends! Fortunately, lenders (mortgagers) look favorably on student loan debt… its like “Good debt” to them… if that’s even possible. It also helps that my wife and I have credit scores over 720.</p>
<p>To add to vline’s questions–would you support legislation to ban the kind of loans you took out–in other words, forcing you to go to that not-good-enough state college instead of BU? </p>
<p>I guess I don’t get what you want changed, since the situation worked out so well for you.</p>
<p>I do wonder why you’re paying so little towards the loans; it seem that you must be making a fairly large salary–I know we had larger payments than that for many years, but we got them paid off before the kids started college, so we can’t complain. I mean, they loaned as the money, so we owed it, right? (and this was the 80s–rates you cannot imagine!)</p>
<p>Why did this student not qualify for financial aid the two remaining years?
Why does the father’s business collapse automatically mean he cannot pay any towards college? Were there no savings? </p>
<p>If he didn’t qualify for financial aid, his father should have contributed more.
If his father didn’t have the funds to contribute more, he should have qualified for financial aid. </p>
<p>See where I’m going?
If you say that your father had the funds but was reluctant to contribute the expected amount, then that is a different problem entirely and really has nothing to do with a business collapse.</p>
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<p>I’m a little confused. You have a well-paying job, and have purchased a home, but do not have the money to pay off your student loans? Did you buy your home with a mortgage loan?</p>
<p>Not every college offers FA when there is a change to a family´s financial situation. If a student didn´t get financial aid first year, he/she may not be eligible in the future.</p>
<p>Yes, the part I don´t get is why he is only paying back so little on his student loans.</p>
<p>I know everyone has their priorities, but I also don´t understand why someone would have a child so soon with 150K student loans. With the kind of difficulties this person had with paying for college education, I would think the prudent thing would be more financially secured before taking on additional financial liability (and having a kid is a huge liability).</p>
<p>Nihility–not all schools meet need. I’m pretty sure BU doesn’t; most schools do not guarantee to. Which is something the student going there presumably knows.</p>
<p>Overall, though, i still don’t get the issue here–the student got what he wanted because of the loans. And apparently couldn’t have gotten it without them. Where’s the problem? Other than he’d rather spend his money on other stuff–but wouldn’t we all?</p>
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<p>Which state school?</p>
<p>(Community college would not be a realistic option to complete a bachelor’s degree after finishing two years, since community colleges offer courses for the first two years, not the last two years, of a bachelor’s degree. However, starting at a community college and transferring to a university as a junior is a common money saving method.)</p>
<p>OP: Now that you’re a father what would you advise your daughter to do if she ended up in the same situation as you?</p>
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<p>Since when do schools control what private loans you can get? Are things different at BU?</p>
<p>I know things are a little different now with schools certifying loan amounts. However, a few years ago when I was taking out my private loans, I had free reign to go to ANY bank I chose. Just because a school provides a “preferred” list does not mean you have to take them. I have a few private loans from a few different lenders - whoever happened to have the best rates for that year is where I went. </p>
<p>We would all love to think that the more we pay for school, the more likely we are to get a return in investment. That is not always the case. Yes, BU is a great school - for those who can afford it. </p>
<p>I WILL agree that not all parents educate their kids on finances. My parents knew nothing about the college process at all, and nothing about student loans. Heck, my parents have only begun saving for retirement when my mom went back to school and got a nursing job 6 years ago. They are mid/late forties. They had NO savings for me at all, ever. They contributed very little to my college expenses because they think very little of college in general. So it is very difficult to make good financial decisions at 18-21 years old when you grow up with this kind of background. I think I did very well, and yes there are things I would have changed, but there is no point in arguing over hindsight. </p>
<p>I am however shocked at what you pay for your loans - I have about $65k in debt and pay around $700/month total (my loans are not consolidated), and I do see a reasonable drop in principal given my rates with each lender. I also pay above minimum every time I have extra money to put toward them, starting with the lender with the highest rate. I would never pay bare minimum so I could take out other loans for a home and throw money in places other than decreasing my debt.</p>
<p>Javidan11,
Thanks for answering my questions. I read your senate statement, and your answers to my questions. I guess I am confused about what you feel is the best thing after saving early. That is always ideal. But for others that find themselves in a various situations out of their control when it comes to college costs, what do you suggest? </p>
<p>And I am not sure what you think could be done. I realize you felt that you were taken advantage of by the banks, and I am assuming that your testimony was part of the student loan debates that were going on at the time. Some of what lead to the movement of gov’t loans and limiting of individual private loans at colleges? So if you would not have done anything differently, but these loans are significantly impacting your life in a negative way, I am not sure what you think should happen. What regulations do you think need to be in place, and what kind of gov’t intervention do you think is needed?</p>
<p>Sorry if I have missed that information in the other posts on here. </p>
<p>And I am not trying to be disrespectful with all of these questions, but as another poster said, many of us are grappling with college costs and how to finance. Personally, I am doing everything I can to prevent my child from graduating with debt, and to prevent us from draining our retirement.</p>
<p>I believe the cost of many colleges are prohibitive for many, but especially the middle class. Many of us that have saved find our college savings plans much too low to meet college costs, despite what we were told 10-15 years ago by financial advisors. We are forced into making a decision between significant debt or lower tier university. It is not easy, but after the recent economy and financial problems, taking on huge debt is not only not easy, but more frightening. And our houses do not hold the value to borrow against either. </p>
<p>In general, we want to do what is best for our kids, and not put any of us in jeopardy financially. Many of our kids will choose careers where a $700-$1000 / month loan payment will not be possible if they want to eat too! So we have to make those tough calls and educate our kids about the best decisions to make as well. </p>
<p>Thanks for endulging us with our continuing questions. I for one am not being judgemental, rather trying to learn from your experience to help make good decisions for my family.</p>
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<p>BU provided him with a list of their preferred providers. If you’re
a student that knows nothing of the loan business and your options,
what are you going to do? Pick from the school’s list or go out on
your own to find a lender?</p>
<p>Jonathan,</p>
<p>I’m going to assume you’re from Pennsylvania (the congressional testimony you provided gives a PA area code for you). According to the Business Week undergrad b-school ratings, Penn State’s business school ranks higher than that of BU, since you mentioned prestige earlier. What made you overlook Penn State in your original undergraduate search (it really seems like a bang for your buck school for any major, especially in-state)?</p>
<p>BCEagle91 - Yes, that is exactly what I did. I knew nothing about loans, but I also wanted to make sure I was getting the best deal. So I went and did my own research outside of my school’s preferred list, on my own, with next to no feedback from my parents. If he was getting such an amazing education at BU, I would expect he would have the ability to do the same.</p>
<p>I’m wondering why anyone here is asking Javidan11 what his advice would be for students or parents today. He apparently has the same poor grasp on financial matters that he did when he took out the loans: He and his wife bought a house and had a kid despite being way over their heads in debt and unable to handle a $700/month loan payment (notwithstanding that great job that the costly BU education prepared him for)–and he says he’d do the loans all over again if the circumstances were the same!</p>
<p>I find it very easy to believe that you (javidan11) found your choice perfectly reasonable in the circumstances of the time - and no doubt everyone in the FA office sympathized and helped you make this choice. Whether or not it was a financially sound choice you may never know - you can’t turn back the clock and take the do-over for a test drive to see which outcome you like better.</p>
<p>If your career (and your wife’s) continue on a healthy upward path, I suspect you will always feel that you made the right choice; on the other hand should you experience an unexpected fall from financial grace such as your parents, you may find yourself questioning the wisdom of that youthful decision - I hope not, since you appear to be on the more fortunate list of extreme education loans. </p>
<p>I’m assuming that the no payment towards principal is what’s allowing you to buy a house in what I assume is a very expensive neighborhood…you are, in my mind, like a gambler on a winning streak. Even if your good fortune continues, you must realize that nothing is certain and this kind of debt can have catastrophic consequences (a severe illness that left either of you unable to work could undermine your plans no matter how dedicated or hard working you are).</p>
<p>It’s hard to tell, since you’re not paying down your student loans, how you will really feel when that process truly begins. Right now you’re in a sort of “holding pattern” - it’s different when you truly begin to pay current earnings towards debt incurred long ago (you’re going to start to wish those payments were racking up some savings in your kids accounts). It’s not just the dollars and cents - it’s how you feel about the dollars and cents at the time - years ago you felt your life would suffer without borrowing it, right now you feel that was a difficult but necessary decision, but the emotional impact of spending a big chunk of money every month on past debt will feel different because you will still want new things, and improvements to your life in the here and now, not just ‘oh how nice it is to be able to pay my loans’. A three year old isn’t nearly as expensive as a thirteen year old!</p>
<p>I hope your gamble continues to pay off, it’s the economic times that have forced so many to realize that loans like this (even when you’re really smart and the school in question is really wonderful) are still a gamble when the dollar amounts in question are such large sums. When you were getting yourself into this position there would have been few, if any, who would have told it wasn’t a necessary next step leading to a solid future…there just aren’t many things that look that certain to most of us anymore.</p>
<p>OMG - you work for an investment firm? Please tell me you don’t actually give financial advice to anyone. </p>
<p>Paying less than $100/mo, you will NEVER pay off that loan, your child will have no hope of having a college education funded by you.</p>
<p>Please go look up Dave Ramsey today and put yourself on the path of financial freedom. </p>
<p>In a nutshell -
Make a budget. If that means tracking every penny for a month, do it. Find out where your money is going.</p>
<p>1 - Get 1,000 saved up in case of emergency
2 - Line up your debt smallest to largest and pay the minimums on everything except your smallest debt, and put as much as possible towards that every month. When that is paid off, move towards the next one and roll the payment towards the first towards the second. And so on.<br>
3 - Save 6 months living expenses
4 - Start funding retirement
5 - Start funding education expenses for your children.</p>
<p>I’m so flabbergasted by the lack of remorse, the lack of knowledge about paying back the loans even today, and not understanding the long term impact of carrying that amount of debt.</p>
<p>He works in Ops - processing trades after they are done. Not to worry.</p>
<p>I want to know, the wife works, right?</p>
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<p>Robert Manning '84, one of UMass Lowell’s most successful alumni and
the head of a company that manages more than $240 billion in assets,
will speak to a record number of graduates at Commencement on
Saturday, May 28 at the Tsongas Center at UMass Lowell.</p>
<p>“UMass Lowell’s College of Management gave me the education I needed
to be a success. When I began my career in the investment world, I was
competing against graduates of some of the most prestigious schools in
the world. I did a better job than all of them not because I was
smarter or worked harder, but because I was better educated than they
were,” said Manning.</p>
<p>Rob Manning joined MFS Investments after graduating in 1984, working
his way up through the ranks to the top position of chief executive
officer and chairman of the Boston-based company, which has been in
business since 1924 and has more than 1,800 employees in operations
around the world. He served on the UMass Board of Trustees from 2006
to 2010.</p>
<p>[Manning</a> to Address Record Number of Grads](<a href=“http://uml.edu/News/stories/2010-11/commencement-speaker-11.aspx]Manning”>http://uml.edu/News/stories/2010-11/commencement-speaker-11.aspx)</p>
<p>UMass Lowell is a third-tier public school located about twenty miles
northwest of Boston University. There are many BU students that take
courses there in the summer because it’s considerably cheaper than
taking the courses at BU during the summer.</p>
<p>One of the guys that I play tennis with from time to time got his
accounting degree from UML. He works in a company that is doing well
and works alongside graduates from Harvard, Northeastern and Boston
University. They give him a hard time because he went to a third-tier
state school while they complain about their student loans.</p>
<p>BTW, I have a degree from Boston University.</p>
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<p>He said that he worked in operations so he probably isn’t customer-facing.</p>
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<p>Our central bank is bailing out our banks with super-low interest
rates for an extended period of time so they can loan at higher rates
and borrow at lower rates to pay for their sins. Actually savers are
the ones that pay for their sins since they are forced to take low
rates for their savings vehicles.</p>
<p>It is not surprising that a similar option would work to bail out
other debtors.</p>
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<p>We had the option of paying off our mortgage back in the 1990s or
hanging onto the cash. I elected to pay it off as there is some degree
of mental capital (or peace of mind) that comes with having no debt.
We generally tried to get rid of debt as quickly as possible. My
mother lived through the depression and we grew up in a fairly
deprived environment - when you don’t have a lot, you worry about
finances. My wife came from a third-world country and was poor and she
was an incredible saver when I met her. She had less than one-fifth my
income but a considerable amount in savings.</p>
<p>A good chunk of the US received religion on debt since 2008. This
BU Graduate apparently didn’t get the message.</p>
<p>I was wondering the same thing, does your wife work?</p>