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The www.FedPrimeRate.com Personal Finance Blog and Magazine

Thursday, August 07, 2008

The Student Loan Dilemma

The Student Loan DilemmaWhen I decided to go to college I knew that no matter where I went I was going to take out student loans. My parents didn’t have much money to pay for college and I had little to no savings for the occasion. Instead of thinking about money and how much the bill would add up, however, the school advisor was limited to helping me choose a school. After all, I was going to have a college degree in four years so what’s the difference how much my student loans added up to? While there are some kids that have a strong and dedicated desire to be something great like a doctor, lawyer, or dentist, most kids planning for college simply go to get a degree in whatever interests them by their junior year. If you plan on going to graduate school at a hard-to-get-into college then the undergraduate school may matter. If you are going to graduate with your bachelor’s and get a job, I’ve learned the institution really means nothing.

I chose to go away to school in upstate New York where most of my friends were going. I had no clue what I wanted to do but knew that I qualified to have just about everything paid for by my student loan. The majority of the loan was through a private bank while just a minute amount was funded through the government. An even smaller amount was given as a grant that I wouldn’t have to pay back. At 18 years old, I didn’t think twice. I packed up my belongings and headed off to what would become the best four years of my life.

After I graduated college, my loans totaled over $20,000. I slowly paid off the government loan which was around $3,000 and deferred payments on my private loan. Although the rate was pretty good at 4.41% I found it impossible to pay the $390.00 monthly payment with my newly acquired job. I applied for consolidations and was denied multiple times. Since the rate was good everyone I spoke to acted as though the $17,000 should be easy to get rid of. But I didn’t go to school to be a lawyer or doctor, I graduated with a degree in Psychology that I settled on after 3 years of trying to figure out what it was I wanted to do. In fact it seemed as though my college degree was more of a high school diploma and all the places I applied to could care less what I studied, only that I had the degree. Completing 4 years of college showed dedication and an aptitude for learning and that was all anyone seemed to worry about. My job was in sales and I had no idea how I was going to pay back the money I owed.

That was 8 years ago. Today my loan now totals over $19,000. The interest keeps building up and the payment remains at $390 a month, a nearly impossible amount for a person that makes $30,000 a year to afford. Now that I own a home I’m going to try the consolidation process again to see if that will help. After all, isn’t better for me to pay something rather than nothing? It would seem from the $2,000 in interest they’ve made that the answer to that is no.

While going away to college was a great experience, was it really worth the price of a new car? I could have easily got the same degree at a local community college for less than half the price and to be honest most employers could care less where the degree came from.

My answer to this dilemma is a big fat resounding yes.

While many kids may seem like they are just going to college for the sake of it, who are we to make that choice for them? I am happy I was given the chance to decide for myself and will do the same for my children someday. Limiting a child to a local community college when they have aspirations is like telling someone who wants to be a police office they can only be a security guard. Yes, many of them will fail and end up protecting the local mall anyway, but isn’t it worth it to give them a chance?

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Anonymous Anonymous said...

I am really sorry if I hurt your feelings, but your dilemma is laughable. And unlike a car, and education does give you dividends. You must be young. I have no idea why you could get all Govt loans, that sucks. But Pyschology? Come on, You probably dont have a good job, you're probably making 24000. Other countries if you dont pass an exam you cant go to College, so yeah if you were just gonna party, why didnt you stay at the local school? You are too funny, Did you make this up?

Friday, August 22, 2008 3:27:00 PM  
Blogger The Suicide Delusion said...

NO I did not make this up. Paying $390 a month is hardly laughable, but your condescending comment on my choice of academic concentration is. Not to mention the part about partying. I didn't realize that partying affects how much student loan bills would be. I also happen to be quite intelligent and after working a slow starting sales position chose to work as a supervisor for a non-profit organization that assessed and modified behaviors of autistic children, hence the low income. I paid for my schooling 100% on my own, and am quite proud of earning the degree without the generous assistance of parents the way you obviously did. I am also proud of my choice of employment since I am making a difference in the world rather than just earning a paycheck. Assumptions are never a good thing and only highlight the obvious ignorance of the accuser.

Tuesday, September 02, 2008 12:43:00 PM  
Anonymous Anonymous said...

I think I could have written this. I'm from rural Kentucky, I majored in psychology and I got a masters in counseling. IN rural KY, 40,000 a year is considered rich. With a masters, I make less and 25,000. My student loan payments are around 500 a month. My whole life I was told in school how college and education would get you ahead. But a friend of mine that left highschool and got a factory job has been making 30,000 a year since. Plus, he has no outrageous student loans to repay. It has a nice house, a nice car and lots of luxuries. Me and my masters are eating ramein noodles and living with my parents, with little hope of improvement due to the student loans.

Wednesday, March 18, 2009 11:21:00 PM  

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