<p>Well, I know that trying to save for big expenditures can be tough esp in high cost of living places, but I wonder if the people with $9300 in credit card debt are all at or below the median income (I don't think any income level was stated); and have they all had unfortunate living and work situations, or is it people who have decent incomes and jobs who simply charge high price items on their cards?</p>
<p>I remarked the other day to my H that for more than 1/2 of my @20 yr. working life I have made less than $30,000. He has been in the same boat as well. And we live in a major metro area, own a home and raise our family. We live frugally, because we've had no other option. Any time we made a big expenditure, like buying a home, a car, re-doing the bathroom, we saved for a long time before undertaking the purchase. That's just the way we operate.
But as you note, big help has been good health (knock wood) and our jobs have always come with health coverage.</p>
<p>I have read stories about successful small business owners--these people talked about how they got the scratch together to start their businesses. Some maxed out their multiple credit cards to provide business capital. </p>
<p>The failure rate of small businesses is very high...</p>
<p>Pretty typical for a small business startup. We found some very good credit card deals (2.99-4.00% with no time limit) and used it a part of buying a rental--along with about 50% cash. We pay it off over 2 years and have none of the hassle with getting a mortgage on a rental home. That way we'll have it free and clear for retirement income.</p>
<p>"Well, I know that trying to save for big expenditures can be tough esp in high cost of living places, but I wonder if the people with $9300 in credit card debt are all at or below the median income (I don't think any income level was stated);"</p>
<p>The quote was for "the average American household". (so half of them would be below.) Statistically, the majority of those below don't own their own home, and health care coverage is somewhat cyclical. We've managed to hit the jackpot as well - no major health crises, a house that cost $81k, and virtually no college bills - but we were darn lucky. (And haven't owned a car that cost more than $3500 - ever.) No complaints either.</p>
<p>My dad's secretary's daughter is graduated with her MD or finished with her residency (not the point) but she has like$250,000 in student loan debt. This is astounding to me, how the eff could you ever pay that kind of money back?</p>
<p>I think it is the responsibility of parents to counsel their kids about the reality of taking on significant debt for college. A 17 or 18 year old does not really know what it means to pay off a loan. If parents cannot fund college and dont want to pay off loans themselves they need to set their kids in the right direction. Lenders and colleges have no incentive to educate kids about debt as they stand to profit from it. There are different ways to keep debt down including need-based and merit based aid, state schools, and even community colleges. In the absence of grants and merit scholarships most in state schools probably have programs in most majors. The SUNY system in NY can accomodate just about every major. It is a difficult decision to forgo a prestigious college or university admission in favor of a state school. And it is a balancing act to weigh college costs against the benefits of expensive schools. But for undergraduate kids on their own financially I think their parents need to guide them.</p>
<p>I will be a college student next so Im going to share an odd situation that has forced me into future debt... I am a good student who lived in a state with two great public universities(Indiana U and Purdue) that I had planned on attending all throughout high school. Unfortunately, I ended up abruptly moving to another state in october of my senior year(divorce). The state I moved to had only one good state school and most of the in-state scholarships depended on lottery money(which i didnt qualify for due to my short residency) and those that didnt depend on lottery money were either very small or only awarded to the top 5%, so basically in-state i was looking at about 10k/yr after a few small scholarships. This forced me to look towards the better funded publics and the privates. Luckily, I had the stats to be offered 2 full tuition scholarships from privates and a full tuition scholarship from a public... sounds good but the housing at these schools were 7800-9500. So I take a full scholarship to the one with the cheapest housing and Im still looking at about 7k in loans first year (the school has a laptop requirement which added another 1800).... and now with the new higher stafford loan limits im probably looking at about 6-8k/yr. in loans(assuming I can get a decent summer job) for the next 3 years as well... so basically after the 4 years are over and interest is added im looking at about 30-35k(this is with me paying a little bit of the interest while im in school and hoping that LIBOR rates that jump too much) in debt and this is with about 28k/yr. in scholarships. And to make matters worse my major (biochemistry) will basically require me to go to grad school to ever make anything over 60k/yr..... So basically its not that students arent thinking about debt, its just that sometimes 30-40k in debt after undergrad is somewhat of a bargain. I see it in my future and it scares me to death but its not really much I can do about it.</p>
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<p>My dad's secretary's daughter is graduated with her MD or finished with her residency (not the point) but she has like$250,000 in student loan debt. This is astounding to me, how the eff could you ever pay that kind of money back?<<</p>
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<p>Doctors are one of the few professions where you can pay that kind of money back as long as you plan to go into a specialty in a metropolitan area.</p>
<p>myheartsinihio, you did the best you could given your situation, and 30-40K in debt is managable. You must be very special to get the scholarships that you did. You could even live at home after undergraduate school (I got the impression you are still an undergraduate) while working to pay off your loan or a good part of it before you start grad school. In my post I was referring to kids who borrow to attend expensive private schools with very little in aid. You worked out your college financial plan in the best way possible for you.</p>
<p>ellemenope, you totally misunderstood what I was saying which was nothing about college admissions decisions. Nothing at all. What I was suggesting is that colleges should take some responsibility in explaining to its students what the likely consequences of student loans might be up front and at day 1. It could be as simple as a one page interpretative statement or for students with potentially high loan committments, more indepth personal discussion. it is one thing for an engineering major who intends to enter the workforce in 4 years in a field where the median pay is $50,000+ to accumulate $30,000 in student loans. It is another thing altogether for a student to graduate with $30,000 in student loans whose dream is to try to make it in the performing arts. High loan payments may be so burdensome as to kill those dreams.</p>
<p>If colleges are willing to enroll students with finaid packages which will saddle them with $30,000+ in debt at graduation, why shouldn't they also be willing to explain the repayment realities to these students at the time students are making admission choices. Notice I said students. </p>
<p>I submit that colleges who CHOOSE to attract students with finaid packages overloaded with loans have an obligation to explain the longer term consequences of their CHOICE to their students. If the students say YES with the facts laid out before them, then fine. However if they decide to choose to enroll in a college whose finaid package is more heavily weighed toward grants and scholarships then fine too.</p>
<p>I agree, and there is absolutely no reason why a college can't include a sample loan repayment schedule/table with its offers. (Except that they might get fewer takers. ;))</p>
<p>when I graduated HS my graduation gift was a set of luggage and a note saying if I went to college I was welcome to stay in the house rent free for the summer. If I went to work here was my monthly room and board fee.</p>
<p>I had a small academic scholarship at State U and went to college. My parents let me know I needed to work for spending money and to pay as much of the bills as possible. They helped me through a few rough spots with some cash but I really learned a lesson on what things cost, how to manage money, and responsibility.</p>
<p>I am in a better position to help my kids financially than my parents were but I also expect them to contribute $$ to their education and and I will not finance the whole bill. I know several fairly well off families who are doing similiar things as their kids pick colleges. Loans must be kept to a minimum.</p>
<p>Many of the posters here seem to be forgetting that the choice is often between taking out loans for college and/or graduate school versus not going to college and/or graduate school at all. I'll would always make the choice to take the loans.</p>
<p>Many students live in households where the family is doing okay and getting by, but there are no "extras" like vacations or shopping sprees before school starts or even movies in a movie theatre. Unfortunately, the financial aid system hits these families hard, particularly if these families are living in places where the cost of living is through the roof (I'm thinking of the New York metropolitan area). If you're a student from one of these "getting by" families and you apply for financial aid, you are frequently told that you just don't qualify for much more than work study and a small Stafford loan. In reality, even if the family lives as efficiently as possible, the family just doesn't have the money for tuition. What is that stuent supposed to do? Even at her state university, she will have to take out loans for college. Then, if that same student graduates, works for a couple of years, and then applies to graduate/law/business school, the same thing happens all over again with financial aid. Many graduate/law/business schools require applicants to include their parents tax returns with the applicant's financial statements unless the applicant is 26 years old or older, even if that student has been financially independent for years. I know of business school and law school applicants who are married with kids who have had to include their parents financial information in their financial aid requests. The result is yet more loans. </p>
<p>So, if the choice is between education versus no education, I think the obvious choice is to get the education. If loans are the investment that you have to make to get that education, then so be it. Can the loan payments be a tremendous burden? Absolutely! Does it mean that buying a house or taking your dream job that that may not pay so well or going on that safari in Africa might have to be deferred? Yes. What's so wrong with that? Finishing school with $100,000 or more in student loans is not an ideal situation, but it is the reality for a lot of people, and it can work. Consolidate your loans, live frugally, work hard ... but the value of those degrees is immeasurable.</p>
<p>Sallawp, I agree that attending college with loans is preferrable to foregoing college is preferrable. However for many students careful research and shrewd choices during the admission process can minimize college loan consequences. </p>
<p>oftentimes it is an issue of selecting a college or two to apply to which are down the "ranking" foodchain a bit. Curmudgeon's daughter chose to attend Rhodes instead of Yale. Our son chose to attend Rensselaer instead of a college like Cornell or CMU. For less accomplished students the choice may be 2 years of community college and a transfer to complete a bachelor's degree.</p>
<p>Seldom is the choice between college + loans or no college whatsoever.</p>
<p>Unfortunately, the choice often can be between loans or no college at all. It happened and continues to happen to a lot of students from my home town. As a New York State resident, the estimated costs per year at SUNY Binghamton are $16,460, which is probably includes an underestimate of actual living expenses if a student eventually lives off campus (and most do). Assuming a student saves $2,500 from a summer job and has a work study job during the year that will pay approximately $3,000, that still leaves approximately $11,000 per year that will have to be taken in loans. Of course, this doesn't include any clothing that the student might need, any travel opportunity, nor any extras like a fraternity/sorority, any club or activity that might require dues or fees or any real costs for getting to and from home. Forget about taking an unpaid internship or other volunteer opportunity during the summers. Okay, so this adds up to a minimum of $44,000 in loans for 4 years of school (assuming that there are no tuition increases over the 4 years). That's no small nut to crack! It's still worth it, though ... what's worth more than an investment in yourself?</p>
<p>For a good student with solid grades and SAT scores, and who has designs on going on to law or medical or business school, I think that this is about as far down the college ranking foodchain that one should have to go. There is only so much that you can minimize your student loans unless Mom and Dad can afford to foot part of the bill. I still believe that it is worth every penny of loans as an investment in that student's life that will pay off for the rest of her life.</p>
<p>One correction - most law and business schools now require all applicants for financial aid to include their parents' financial information until they are 30 years old, regardless of financial independence, and whether or not the student is married with kids, has served in the military or any other factors.</p>
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There was the example of the young woman who was retraining by getting a nurse practitioner masters degree at USD. She figured to be $165K in debt by the end of her educational odyssey--at least she went to a cheap undergrad.
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<p>This was a really unwise choice. Hospitals across the country have tuition reimbursement benefits. The cheapest way to be a nurse practitioner is to become an RN at your local community college and let your employer pay for your BSN and MSN. I can't fathom that kind of debt for nursing.</p>
<p>regarding the sample loan repayment tables... most of the private loans I have looked at all include sample loan repayment tables.. but they use an impossibly low interest rate and they fail to take into account the fact that the interest rates are variable. Also, here is a site that calculates your monthly payment on loans <a href="http://www.finaid.org/calculators/loanpayments.phtml%5B/url%5D">http://www.finaid.org/calculators/loanpayments.phtml</a> .... I also found a website that calculated how much money you needed to make per year to be able to afford your loan repayment (it assumed that loan payments should be no more than 15% of your total income.</p>
<p>Thanks for clearing up my misunderstanding, originaloog. Sometimes, numbers on a table don't really connect with people who have taken out the loan. I think the loan repayment tables should say something like:</p>
<p>"With your monthly student loan payment, you could have leased a Mercedes Benz XXX for the month." </p>
<p>Maybe that will provide some context to borrowers about how much $$ their student loan repayment will be.</p>
<p>I have to agree with you, momoffour, about the outlandish nursing debt. The young woman had gotten a BS in something like medical services and found that the jobs she qualified for were running a doctor's office. It sounds like she is trying to compact an RN and the Masters as part of this accelerated program.</p>