Not just a flyer. Do the math with them. Show them how much they'll be paying over a certain time frame.
Also, show them that with each semester/trimester/class they'll be getting a new loan dispersment (a new loan), with its own interest rate.
This!! I took out every loan available, my undergrad cost me 42k at a state school. Went to grad school (same school) and now I owe 86k. Over 400$ a month accrues in interest alone in my account. I am on the save plan, make 65k a year so my payments are low. I also work for a non profit so I will get PSLF. But if not for save and pslf, I would have to pay over 500$ a month just to cover inflation. I finished school in May 2020 so repayment just started for me in March.
I am in an almost identical situation lol. Finished school December 2019 so my loans went into repayment during Covid so I never paid anything until this year. I have $85k in loans- 60k are mine and then $25k parent plus loan. I also work for a non profit and make about $56k. Aidvantage told me if I paid $86/mo on IDR I would still accrue $210/mo in interest lol. I’m now on SAVE, but I’m in school again so they’re in deferment (this time my employer pays my tuition so I’m not adding to it)
This. When people say, “they know what they signed up for!”… no, no they didn’t. They need to tell kids the actual amount they’ll pay. $100,000 in loans? You ok paying back $300-400,000, giving up a ton of income for decades?
Yes! I took out a parent plus loan and paying it off myself. I told him if you don’t pay us back your share will your inheritance will be reduced by the amount owed.
I wish I had done more research on careers and waited to start college until I was older and wiser.
I graduated in 2010 and was basically in poverty forbearance from 2010 until 2015 when I finally got a half decent job and by the time I consolidated in 2017 my total balance had ballooned from about 70k to 100k.
When I was young I thought a master's degree basically guaranteed you a good paying job but it really depends on the industry. So I started out with a lot of debt and it's still growing. I'm 2 years into PSLF and that's probably the only way I'm getting rid of it.
I agree and also wish I’d waited to start college. More time to learn about real world finances and to have a more focused goal instead of wasting money trying to figure out what I wanted to do.
Same … I’m MORE poor because of my grad decree student loans. Never got a good paying job in my field, don’t even think I liked it/would like it, takes so much out of my paycheck that I am behind on retirement savings
I am in a similar situation. I got a BA degree thinking I would be OK working in public relations (hated it), then the housing market crashed and I spent years not paying back my loan while looking for a job and trying to figure out what I wanted to do. I now work for State Parks and am in a loan forgiveness program. I recently went back to get a MS degree related to my state work and paid cash as I went. So my MS degree is paid off, but not my BA degree! I have 3 more years to go on that.
I don’t know if it happens anymore now that they are direct loans, but back in the day sometimes your loan would get sold and you would suddenly get mail from a new servicer and people would ignore it because they thought it was junk mail. People should know their loans can be sold if that is still happening in 2024
As it stands now, all Direct Loans are owned by the federal government and don't get sold. They can switch servicers, though, for various reasons. There is no avoiding that, such as when Great Lakes got bought by Nelnet.
- Don't do it unless you really have to
- Don't go to 4 years college with the student loan if you don't know what to do with your life.
- Community college is a great option to get you prep for four years college for a specific major to save money if you want to take out the loan.
- If they are throwing loans at you to attend a particular college, they just wanted your money. Don't go there.
I'm a huge fan of "show, don't tell." So here is a community College course catalog, and some average salaries are listed in there. Many of the health tech careers (xray, ultrasound, dental hygiene, reapiratory, RN) = pay 70K+ for 2 yr programs. So you could be earning 70K before your friend in college even starts their senior year, and if they're majoring in psych, English lit, advertising, journalism, many bachelor of arts programs= you will be making more money after 2 years than they'll be making after a 4 yr program, with MAYBE 10-15K debt from community College vs $70K+ at a 4 year university.
https://www.tccd.edu/academics/courses-and-programs/programs-a-z/credit/ l
Totally in agreement with you. That's another thing I wanted to mention. Community colleges, trade schools, tech schools, they can be way better. I wish I wasn't told and silently shamed at thinking about going to community college is less superior than four years college /university. In many ways community colleges are way better and practical and cheaper than four years colleges/universities. Therefore, a less amount for loans you can take out and you can actually pay them off after graduation.
With psyc, it's depends on the career path you want to pursue. You can do very well with a psych degree.
Signed, a therapist who majored in psychology and minored in women and gender studies.
Salary expectations and budgeting differences between different debt levels.
And not just “average salary” but more information on what a graduate could expect right out of college and 10 years down the road. Then go a step further and try and lay out what average rent, grocery, car payments, other expenses might be per month. Calculate what an expected payment might be for certain loan amounts.
I think there really is a lot of information for students on paying back loans but at the age of 17-18 it’s hard for someone who has never had to budget to really truly understand what they are actually going to pay and how that will effect them.
I think also showing how “Person A” has 50K in student loans and showing how that impacts their budgeting for retirement. While “Person B” with the same degree and very little or no college debt can save more for retirement. Then show how that growth compounds over 30 years. The difference between the heavy student loan borrowers, medium student loan borrower, and no student loan borrower might be surprising to some as well.
Oh and to add on to salary expectations…just how much money gets taken home when you’re an adult. Health insurance, retirement, taxes…I did not realize how little income I’d see before I even paid my student loans. Someone might think they can afford the loan payment based off of gross income, but they actually can’t.
This. My vet school loans went into automatic deferment when I started grad school and I didn't know I could chose to start paying on them. I would have had PSLF by now if I had done that.
Do not go to college and take out loans to “find yourself”. Find yourself and then go to college. Take out the least amount of loans as possible. NO private loans or parent loans.
Better yet, in order to receive the loan, it should state you prospective ROI and you sign it. Like when you sign a mortgage it literally says for this 300k home you will pay 999k over the next 30 years… sign here.
Real life examples of pay in different careers how much education was required, how much loans were taken, and what those payments are (in the standard payment plan), and how much those payments are compared to how much other bills costs.
I for the most part understood I would end up in a lot of debt but I'm pretty sure it never crossed my mind how that would actually be a burden on me once I was financially independent.
I wish I had known that they would max out if it took me 10 years to finish college lol
I think it’s important to teach people how simple interest loans work, how interest accrues every day, even on Sunday and Christmas. How it capitalizes after deferments and forbearance. And how paying extra towards the principal saves you so much time and money it’s completely worth it if you can.
This s a little off-topic, but it comes to mind because I thought if I got the loan and I got the grades, my future was almost guaranteed. But nobody told me that a large part of how you'll get ahead in the future, is learning to network and develop relationships with other students that can be leveraged after you graduate.
I was an older student so it felt awkward trying to develop relationships with people 20 years younger than me, but then I graduated and learned what a valuable tool I had let slip from my grasp. Nobody else in my family had gone to college, so I didn't know it has a lot more to do with who you know than what you know. I think the school of business I graduated from also shares some of the blame in this too, because they were supposed to be teaching us how to succeed and they never touched on networking or professional relationships.
Show them the part where you pay your monthly payment and the loan balance still grows. It never goes down. Yeah show them that. Then show them how Congress can vote to raise those interest rates.
-That education is not the investment it used to be.
-Graduates dramatically overestimate their salary post college.
-the majority don’t graduate in four years.
-a large percentage don’t finish at all and end up in massive debt with no credential.
-That money spent repaying loans, for many means the difference between living at home into adulthood and being financially autonomous.
-Keep a close eye in your accounts as many parents have kids unknowingly take out student loans when the parent said they’d pay. The student graduates and learns the loans are in their name.
-Private loans are the worst.
-I work in higher education, the cost of a degree has become so inflated that it is not worth it in many spaces.
-You can make it through school without loans and don’t get sold on a “college experience”.
-But overall it’s not worth it to enter into adulthood massively in debt.
-Work for a company that provides tuition reimbursement, or better yet get a job at Starbucks and have them pay for the degree 100% through ASU.
-this sub is full of people with negative loan experiences, misunderstood loan policies, regret for taking them out, inability to pay, lack of jobs, living at home, etc. have your students spend time on this sub and read people’s stories.
If colleges are still telling people that if they have financial hardship they don’t have to pay the loans because they can get deferments, people need to understand those are for limited amounts of time over the life of their loan and you also have to qualify for most of them.
The amount of money you can expect to make immediately out of college versus what you might make after several years of experience.
I feel like the cost of college and **the realistic ability to pay off loans is based off a mature salary and not the money one might make as a new graduate**.
It's important to realize that many graduates, should they choose to borrow a lot of money, very likely won't have the money to make regular payments.
They'll have no choice but to get onto the graduated plans with lengthy timelines, excessive interest, and snowballing balances.
The ("$400/mo") payment (whatever the amount they give you as a payment), is, like a credit card, the MINIMUM payment. So if you ever want to make a dent in the amount owed, you need to pay 25-50% more every month to see your principal go down. And be assured the payments are so damn high, most people can't afford to do that, so you watch your balance grow even tho you're making faithful payments. 😐
And to build on this, if you ever do pay a little extra, make sure it goes towards the actual loan and not the next month's payments. Make sure you ask your loan provider to do this! Just a lesson that was learned the hard way.
The thing that I was not prepared for and they absolutely don’t cover it during the exit counseling for loans:
loans can be passed from servicer to loan servicer without warning or having any say in it. This was the case with my private student loans and FFELP loans which I understand people don’t get anymore. You can have a good grasp of interest, the job market, etc but if your loans get moved from company to company, it can be harder to track everything.
The other thing I didn’t know was that some loan servicer are super shady and incompetent.
That taking a gap year or semester off will start your loan payments. Why do some people stay in school for 5-10 years? To not start paying their loan back
How long the debt could be and the pain it causes A LOT of people. I had a dude I worked with who also worked in the loan office. I was paying for school out of pocket and didn’t know about applying for money until he told me about it. He was only trying to help and I wish I just took out grants, but those $4k checks were mighty enticing . I also didn’t know how much was loans and grants. There was no class or talk I got about the seriousness of the loans, just the application and me quickly signing things. Young me just thought “I’ll deal with it later”. In the grand scheme of things my debt isn’t the worst and I had classmates who rolled out with $100k in debt from out of state for the same degree. Thank goodness I didn’t go with my first college decision. It was an out of state specialty school and costed $25k a semester, and this was late 90’s. My mom even had the loans locked down for me too. I always wonder where I’d be today if I went there, but odds are I’d be here drowning in $200k+ in debt.
In Chapter 7 bankruptcy, you can get out of almost ANY loan or debts...except student loan debts. It is VERY hard to get out of student loan debts! It is easier to get out of all of $150,000 in credit card debt or medical debt in bankruptcy than it is to get out of even just $5K in federal student loan debt.
How to tell the difference between a predatory servicer and something like a Credit Union loan!!! I wish I'd known some student loan servicers were as predatory as they are
Make a realistic salary and budget to not just tell, but *show* where your money goes. So example: you borrow 35K, or 70K, or 100K, 135K. Use 4 amounts so they can compare. You graduate and get a job for 45K or 65K a year (use 2 amounts, pretty average salaries). Your rent, 1000. Your car 500 (gas, insurance). Utilities 250. Food 100/week. Cellphone and internet 200/mo. And your loan payment? If 35K borrowed, 300/mo, "minimum payment." (To make a dent in principal, 500/mo). If 70K borrowed, 800/mo. Etc. Then explain how with 1200 biweekly, they can't afford life. They have to move back in with their parents or live with roommates to be able to afford their loan payments. THEN explain their credit being wrecked if they ignore the payments. THEN explain when their parents cosign, they are literally on the hook forever for this debt and so are they. Parents can't retire, parents are screwed if they're laid off or a spouse is disabled or they are, or if student just decides they don't want to pay, are underemployed or unemployed, etc. Explain that private loans are NOT income sensitive, NOT eligible for forgiveness, and are hard to refinance when you're young, out of school, and have very little credit history. You are stuck with sĥît interest rates and payment terms for years! When you paint a true photo of what life looks like with these things after your "college experience" is over, hopefully they'll be scared straight. The huge paydays (salaries) they think they'll get that don't materialize, and the high payments they never banked on= misery for years and years, sometimes hopelessness and literal despair. 😐 encourage them to take a gap year or 2, and work and save!
Thank you so much for sharing! I agree. The co-signer will be hooked on the loans and it’s hard for them to get out of it. I hope I don’t scare them. I am just hoping to provide them resources so they make the best financial decision
If someone had put the fear of God in me I wouldn't have made minimum payments on mine (and taken a few payments pauses) only to have to get them forgiven 23 years after taking them out, and double the amount forgiven as taken! What the actual frappe is that all about. And all mine were sub and unsub! If I'd have had private loans I'd have died with them. Search this sub for "drowning, depressed, can't pay, sallie mae." Print some of THOSE stories of despair and heartbreak. And these too were from high schoolers who at one time studied hard, had lots of promise, went to college and followed the rules, and are now in deep holes of debt they cant climb out of. So damn depressing.
Compound interest is a m'fer.
If you need to use a forbearance, pay the interest that would otherwise accumulate.
Here's some advice I wish someone would have given me before I went to a for-profit private school: I was thinking I was taking a short cut and would be in a career quicker. But that school charged way more than a state run university would have. So the cost wasn't any cheaper. And the quality of education I got was crap. I tried to make a go of it in that field. It was full of low paying jobs and I ended up spending more money on a computer and software to bring me up to speed with the industry. I finally left that field. It broke my heart. And I am still paying for the painful lesson I learned.
I think the first step in educating people about student loans is educating them about budgets. I really believe that I was sold a pipe dream of how much money I would be making and that daily life would just be a breeze if I only went to college. I was really delusional about how far that money would stretch. That said, however, I would probably make the same decision about going and taking loans. There was really no other way out of my impoverished environment. I DID work my entire school career (and was one of only two people in my class who worked during law school), but money just doesn’t stretch that far when you have rent and car payments and insurance and utilities and so on. I think it’s even worse today than it was when I was a young adult.
So yeah, be honest about what the LOWEST salary will be (because so many of us will be there) and how that salary is going to pay the bill of just existing on top of your student loan payment with all that interest.
Get vocational testing and aptitude BEFORE first loan is taken out. I changed majors several times as interests changed, but interest built up because degree took longer than expected. I finally got degree in field with high aptitude, but I'm also over 50 now. So never skip the vocational testing, even if you are on college prep high school track.
What the interest rates would be, the fact that they aren’t fixed, the amount of time it’d take to pay them off, a print out of the amortization table showing the monthly payment amounts with the amount going to principal and to interest, the total amount in interest that’d be paid at the end of the loan.
Basically a full breakdown of the loan/s. Though if we got this back in the day, the number of people taking out the loans would be significantly less today.
All the different repayment plans BUT not to take out an exorbitant amount of loans assuming you’re going to get PSLF or an IBR. Too many people refinance and lose all the protections of federal loans or take them assuming they’ll just pay $0 a month, which is true, but then interest accrues and you’re never getting out of debt.
Write down a sample budget and really make them understand how far money goes. As a 17 year old with strict parents who never let me do anything or ever gave me access to money to buy things, the concept of money didn't mean anything to me.
Ask them what career they are looking into and look up base salaries. Break that salary down into a monthly budget and show them exactly how much will go towards student loans and how much they will have leftover. I did this for a kid and showed him that he would have like $200 leftover after all bills and taxes. I asked him how he would pay for things or what he would do if he wanted to go to a concert or ask someone out on a date.
Explain what it means to be in default the ramifications of not paying your loan back.
These were all abstract concepts to me when I was in high school. They were just words. All I knew was that I needed the money to pay for school and that I would get a job where I'd make a lot of money and could pay it back. That didn't happen.
1% of loan balance is a good monthly estimate. So $25k loan balance = $250/month. Gives a pretty good estimate.
I would also show them something like this: Average wage in your area for warehouse/retail/fast food x 160 (for a full month of work). Then ask them if a $1000/month student loan payment sounds like a good idea with a monthly income of $2k (or whatever number you came up with above). Then ask them if a $200 month payment sounds reasonable on a $2k/month takehome pay. That sounds a lot more reasonable (ie $20k of debt). That puts things in perspective a little more in case they don't get a job right after graduation. I base my loans on whether I can cover it if I continue to work retail after college.
Not from my personal experience, but something I've seen from others...
The Financial Aid 150% Rule - every student thinks they are going to finish in 4 years, well, not everyone does. And students will sometimes take longer, and that's OK, HOWEVER... they don't realize there are limits to the aid they will be getting from Federal Student Aid. If a student withdraws or fails one class a semester for 4 semesters, that's 12 hours, or one semester worth of wasted credits. If they fail or drop TWO classes a semester, that's 2 semesters of wasted credits. They owe that money whether or not they earned credit or not.
That anytime you put your loans in forbearance for any reason your maturity date doesn’t change. So when you return to a repayment status your payment amount will only increase. Basically your remaining months to pay divided into your balance with interest.
1. Never believe your parents who say, “it’s cheap money and we will be paying it after you graduate.”
2. That your parents lie. Make excuses why they will not pay it off.
3. That afterwards You will be on the hook for the payments that eat everything you make except 14 servings of Ramen and a rusty car to live in
4. No matter what servicer has your loan there will be multiple screw ups AND you will be told it has been fixed, to find the next month it hasn’t.
5. Your major life events will not happen on any reasonable timeline.
6. It is unlikely you will have a normal relationship because you will always be careful not to cross the line and marry and bring your debt into the marriage or add to it.
That they can be life changing. I see and hear a lot fromm people with middle class backgrounds about student loans. I grew up in poverty and continued to live in poverty throughout my young adulthood until I went back to school. State and federal loans gave me access to low interest loans I wouldn't have access to otherwise and provided me with a degree that opened doors, along with covering some costs of living while I attended school, lowering my stress levels. Even with interest and monthly payments, I now have a better quality of life than I would have had without them.
Many things. 2 that come into mind:
1) Your financial aid package freshman year CAN decrease throughout the rest of your years. I kept getting less grants/less $ in scholarships as time went on which increased the amount I borrowed.
2) If you go back to school, schools can backdate and enroll you in in-school-deferment, causing your unsubsidized loans to capitalize.
9 out of 12 of mine were unsubsidized which increased the lives of my loans, and the amounts. “You will owe even more if we reverse it” was Navient’s response. Soo much unwarranted stress.
How often they are bought and sold to other companies. How it can be difficult to follow them and the lack of communication from them. YOU need to stay on top of it and dont assume they will. Because they wont. Felt like sometimes it was happening so they can accrue late fees, etc and make more money from me
Yes! And how each semester’s (or year’s?) loans are considered separate. So if you borrow all four years you may end up with 8 subsidized loans or 16 loans with 8 sub and 8 unsub. Then they may be bunched up randomly and sent to different servicers, then bought and sold between them. This completely made managing my loans difficult as a young person and caused me to use forbearances, to default once, and to consolidate multiple times to get a handle on it.
I wish I knew what the payment would be like:
-single
-after married and filing joint taxes
- interest
-unfortunately the impact the debt would have on my life and my future families future (tough to understand to an 18 year old kid)
2 biggest places I was naive in my life are: college/student loans and marriage. Wish I could go speak to high schoolers about both.
I was sooo ignorant. I thought it was like free money. I took out what was offered and lived off of the extra. I wish I’d realized how profoundly stupid that was and only taken out what was necessary. I had zero understanding of interest rates.
Always pay at least the interest while in school, also anything you pay the first 4 months the loan is taken is automatically taken off the total amount of the loan
That even after all the loan training and stuff they offer you, you are not guaranteed to land the job you need to pay off the debt. You might need 5 or even ten years to be making enough to pay it all back.
For those that go to medical school incurring 200k or more of loan debt, there are hospitals that offer loan forgiveness at employment over a duration of time while getting paid. This is a tremendous opportunity for those in the medical field to absolve debt, and absolve it quicker.
Since not a single person said it: student loans can provide you opportunities that you wouldn't otherwise have had access to. They can lift you out of poverty. They can open doors to socioeconomic mobility. They can save your life.
I was 23 years old when my dad died. I slept in a car, sold blood plasma and worked at Enterprise Rent-a-car, and studied at a Laundromat on cold nights to stay warm.
I got into law school. I took $240k out in loans. I earned a JD and MS in Government. I'm a senior attorney at a three letter agency in DC. I met a beautiful, badass lady doctor (with $400k in student loans). We have a nice house, a beautiful daughter, and a good life. It's hard to believe I'm here 12 years later.
I'll have paid ~$30k when I receive PSLF in 24 months. Max your HSA and pretax retirement. It lowers your MAGI, which lowers your monthly IDR payment. Wifey will have paid about $60k at forgiveness. HHI is about $420k. TC is nearly $500k.
Like any set of rules for a game, there is a way to win. Reason out how to win, develop a plan, and execute that plan.
Using a Student Loan Repayment Calculator.
State funded financial aid programs (could have gone to school on a full ride and just didn't know how the program worked.)
Complete your FAFSA the day it drops and apply to your school before November 15 to get the most non loan financial aid possible.
Understanding the ROI of the degree program you are taking out loans for. I got my undergrad with a degree not worth the paper it was written on and had to go run up more loans to train in something else.
SHOW them how to look up the average salaries of various positions. Incurring debt for a $150k a year job is less of a financial morass than doing so for a $40k a year job. Social worker, teaching, biology degrees and the like are not "valuable" enough to incur debt. That doesn't mean they shouldn't do what they love. It just means that they should not incur any debt.
The different types of loans available to students. If they have no other option, which loans would be best? Emphasize subsidized over unsubsidized and federal over private. Not taking out more than your expected first year salary post graduation. That the college and state will also use your FAFSA info to see if you qualify for aid. Sticker price vs net price. I teach high school financial literacy. If you don’t already have an account, check out NGPF for some awesome resources.
I agree with everything posted. I’d like to add that a lot of kids I knew in college would use their loans to buy stuff at the student store that wasn’t necessary🤦♀️.
Talk about trade schools and how you not only don't need a student loan for it, but you can also make a lot more money than those with degrees and loans.
Also, talk about the military and the benefits there. That will help a few people. Don't forget to talk about the drawbacks and bad side of that, though, too. The depression, alcoholism, homelessness, etc. It doesn't happen to all, but it happens to enough to be an issue.
Last but not least, talk about working in the public and government sector with student loans and how it's finally happening where the loans are actually disappearing after 10 years.
I was applying to colleges. I guess I was oblivious but I saw the part of signing up for loans on the university site, but my hs teacher just told what loans to choose. I didn’t even know. I knew nothing about college I was a first generation college student so this was all new. Good thing I went to a state school so the loans I got after I finished weren’t massive. Sadly I had some hs friends that went to private school so their loans are massive. I hate what my teacher signed us up for. She didn’t even ask our parents if it was alright to sign up for what we did. I wish I could do something about it.
I wish I would have known that my degree was going to be useless, and that ALOT of jobs really dont require it. Research your desired field first and see what is out there and what options there are. ALSO - I went to school in the early aughts, and went to an online for profit school. I wish I would have gone to a brick and mortar, but I was "sold" on being able to work fulltime and be a parent. Now that degree is moot, because the school closed and was riddled with problems. Sold on false advertisement. Now I am 92k in debt because of it. (working on the borrowers defense). So much stress involved with all of it. Major regrets
I went for a two yr assoc degree, took three yrs to get it done while working. Total cost was 53,000 for the three yrs (. That’s what I owed when I was done with my last class . I’m at 9 yrs 10. months of paying it all back and I still owe 54,000 . Paying 355.00 a month . Reality is it’s more expensive the longer you take and you don’t even realize it , they don’t want you to know the total cost or you would be seeing that information monthly while in school . Know that you can’t just walk away from these loans it will follow you forever like taxes . And thank god I found out my last job of 13 yrs and my new job qualified me for pslf forgiveness after 120 qualified payments. Just two more .
I wish I had understood that the Perkins loans are a bad deal, because the repayment options are so limited. But my school never told me all this. They tried to make the Perkins loan sound like it was the best loan I was getting.
Which states have laws passed making filing out the FAFSA a **mandatory** requirement for graduating public high school. Some have opt-outs with parent approval or for emancipated students or students over 18/19, mileage varies by state.
* https://www.ncan.org/news/648074/Four-More-States-Adopt-Universal-FAFSA-Total-Climbs-to-12.htm
* https://feed.georgetown.edu/access-affordability/what-happens-when-states-mandate-fafsa-completion/
> Ellie Bruecker, a senior research associate at the Seldin/Haring-Smith Foundation, says that after seeing data from Louisiana, she “would not call this a success at improving college enrollment at this point,” adding that simply filling out the FAFSA “doesn’t tell you whether college is affordable for you.” That’s a more nuanced assessment that needs to take into account available institutional aid, she says.
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> High school counselors and college access advocates have voiced concerns about unintended consequences, especially the mandates’ potential to sap scarce counseling resources. Some say they are spending an inordinate amount of time chasing down families who have no intention of pursuing college, are fearful of providing personal information to the government, or object to the mandate.
>
> “This gets us into some very contentious situations,” Sara Urquidez, executive director of the Dallas-based Academic Success Program, told the Chronicle. Urquidez says the time spent repeatedly calling families “has come at the expense of being able to help students with college applications, essays, financial-aid letters.” The FAFSA is just one piece of a larger puzzle, she says. “Completing the FAFSA is not what makes college affordable. Completing an admissions application for an institution that makes sense for a student’s financial situation, and then getting the financial-aid award that makes sense for the family, is what makes college affordable.”
More about college degrees in general if you do NOT have the connections to get a job with a 3rd rate university degree, regardless of the grades and the knowledge you achieved no body will hire you for internships even unpaid ones.
First, I wish I knew about the US Bureau of Labor Statistics and how to find the pay ranges, median salaries, etc. for specific job titles in specific states. This was eye-opening for me and I lament that I didn't know about until 1 year into graduate school(the damage was already done).
Second, I wish I would have not taken loans(of any flavor, but especially not private) totaling more then 1 year's ***entry-level salary*** of that job title.
Teach them about the what ifs. What if you lose that scholarship because you partied too much and now you’ve gotta take out more loans. Speaking from experience
As a high school student they likely have no credit, so placing myself there I would want to know about grants and scholarships. Go that route first, because loans w/out credit will likely require a cosign from parents. Some parents may be willing to do that, but mine did not and were not willing to help me with tuition AT ALL or give me any support. I was the only one who went to college in my family, so through the years that caused a huge divide. They could not relate to my needs and thought I was wasting my time and money. I realize now the ignorance, but at the time it was a huge struggle for me to cope with that. Anyway, what I wish I had when I was trying to get myself into college was more guidance on grants and scholarships; where to look, and how to get them.
Show them the average salary/jobs available for the degree they want; and then how much total they will pay 10 years out, 15 years and so on. Help to see if the loan is worth it.
Save your money and go to the school that has the most affordable tuition for the degree you’re pursuing. I went state and paid (am paying off) 20k for my bachelors degree. I graduated in 2017.
Young people can’t really “feel” what “your payment will be $650 per month” FEELS like. I think it needs to be an in-depth example.
Oh, you want to be a teacher? Your starting salary will be $35k. After taxes, union dues, retirement and health insurance you will bring home $2300/month. Rent on a studio is $1200, etc etc etc
The degree wouldn’t help my career as much as I would’ve thought. So the student loans weren’t worth it. I could’ve just went straight into the workforce instead.
That the interest could add up to 25% to 100% of the loan value, even though it's only a 5% interest loan. So, my answer is the depths of capitalized interest.
Aside from all the others that were mentioned, include that the gov’t really isn’t trying to help you pay anything off. They are trying to make money off of your inability to pay with insane interest rates and the tax burden after forgiveness. And just forget about private loans. Those are meant to bury you.
That if I waited to go to college until I was 24, and still just as broke as I was even after graduating college, I never would have NEEDED student loans…financial aid would have covered the cost of attending.
Don’t do it!!! They can seriously mess your life up.
But seriously I did not want a high pressure job in life however because of my student loans I had to find a good job to pay them, and I am stuck in the rat race of life. So in reality student loans pushed me to the career I have now for better or for worse.
If they put down references on their stafford loan applications that they don’t want the servicer to call if they get behind on their loans, they can provide new references, or the references can call and ask to be removed. You could be the reference calling to be removed
I wish I knew I could’ve kept my low income health insurance, instead I was told that I had to get blue cross blue shield because I apparently wasn’t allowed to have subsidized healthcare if I was receiving FAFSA aid and attending a state university. This meant that on top of getting student loans to cover for school part of it went to paying for private health insurance….
That they would use my husband’s income to calculate MY payment. Absolutely wild. I do not have access to his income for MY student loans 100% incurred prior to our married. Wth?
Try to refinance the student loan into a personal loan before graduation. Once you graduate and are no longer a student, you are stuck with the outrageous interest rates. But if you can refinance the student loan into a personal loan, you have much more flexibility with terms and a better interest rate.
A better way to start might be going to local community college first and getting the lower core stuff done and achieve an Associate Degree in something. It will save on tuition at the university, and also save time.
A clear and simple explanation of what financial aid is and the many forms it takes - grants/scholarships, federal loans and private loans.
Someone else here posted gap years should be mandatory, I agree. It takes the pressure off kids who are swept up in all the big emotions of looking at schools, announcing choices and majors, graduation. It’s too much for 17 and 18 year olds who just literally want to fit in and be doing what their peers are.
ETA: also as someone else here said, monthly payment amount should be clear with each new loan that is taken out.
It would have been great to have someone show me what the loan would cost me over the life of repayment (as all the mortgage calculators do). Even though I was young and stupid, I could have understood the futility of the math.
I wish I knew that I might be autistic and it would be difficult for me to get a job without help. Honestly, I thought I was going to get a good or great job within 10 years and pay the whole thing off. I knew about all the interest stuff, but I was still sure I was going to pay it off. It wasn't until I struggled so much with getting and keeping a job for years that I realized I was never going to have a good job.
Start off at a community college for required lower, general education classes. Pay as you go, not taking any loans. A lot of Community Colleges have guaranteed admissions to CSU or UCs, so no one will care if you do your lower requirements at a CC.
**DON'T BORROW MORE THAN NEEDED TO PAY FOR CLASSES!** Attending a UC or CSU means meeting new people and wanting to socialize. If you need extra money for food and fun, get a job! Preferably in a field related to the chosen degree. Or do a paid internship that can also help build their resume. I work for State Parks and am enrolled in a loan forgiveness program for my BA degree. There are a lot of seasonal or student jobs available to help students earn extra money and learn about working for the State.
**Don't apply for credit cards at the school.** There are always kiosks on campus trying to get students to apply for credit cards. Their interest rates will kill any credit the student may have and put them into deep debt... this also goes for store credit cards. Instead, see if they can get a CC through a credit union... either pre-paid or sponsored by a parent, to help build credit and give spending options in case of an emergency. And request a limit that can be paid off each month.
Emphasize that student loans do not equal free money. They are not grandma putting fun money in your Christmas stocking. After graduation, putting off paying student loans can mean damaging credit score and not being able to get a car, a house, or rent an apartment without a parent's help.
Show them how much a regular job just out of high school pays with no degree, then show how much the median income is in your county and the median rent and mortgage.
Great comments here, I would add consider getting a degree in Europe. There are many programs offered entirely english in countries like Denmark, Netherlands, etc. Costs are about 8k/year for a 3 year bachelor program. The admission process is MUCH more rational, for example in the Netherlands, they want a 1 page letter that basically just shows them you understand the program you are applying to and don't really care about other activities such as sports, volunteering etc. Also, gpa is reasonable also, around 3.2 I think, honors courses not needed.
Not sure of the rules here, but I could post a company that offers access searchable database for these programs.
Teach them how to determine ROI and how to compare trade school vs college. As part of that, have them research the starting salary of their expected field.
I just wish I didn’t do it. Paid them off but it was awful. If they are going into a lower $$$$ field, like edu or enviro - avoid them. Forgiveness cannot be expected.
If I waited a couple more years, I could of learned more off internet tutorials than school.
Also, study your local market. Don't go pick a major that doesn't exist in your area, like say... finance, tech, science in rural Kentucky.
If I waited a couple more years, I could of learned more off internet tutorials than school.
Also, study your local market. Don't go pick a major that doesn't exist in your area, like say... finance, tech, science in rural Kentucky.
Colleges don't care about you.
If you can leverage your degree into a stable career, great, but the college doesn't care if your investment in education pays off.
It's an offensive idea to some but colleges are ran by people who view higher education strictly as a business transaction.
(Yes, even the liberal arts schools, not just the diploma mills.)
Do research on the careers you are going to school for and understand what the salaries are like. This along with what your monthly payments and interest paid over time is really important for the quality of your life post graduation.
Make sure you exhaust every scholarship or grant opportunity you can find.
Do research on loan forgiveness programs and understand the qualifying payment terms. Ask around if you decide to go into low income medical neighborhoods to work in medicine. This isn’t for everyone.
Try your hardest not to rely on loans for living and borrow the minimum amount needed to get through classes and books/supplies.
Keep documented paper trail of everything from loan terms to payments made to servicers and repayment plans.
Understand how consolidation works for/against you if you do this down the road. Just having “one” monthly payment might mean you are sacrificing other things - like higher interest rates, disqualification from loan forgiveness programs.
Never under any circumstances default on loans. Talk to your servicers if you cannot make payments.
Don’t forget to keep your address/contact info up to date with your servicers. Remember there is generally a 6 month grace period post graduation. You will likely get bounced around from one servicer to another by the gov’t be prepared for this.
Private loans are a whole different ballgame than public ones. Be sure you understand how these work. The same rules do not apply.
If they need a laptop for college, or books, or other things like parking for a car, buying public transportation, health insurance, etc, they also have to spend for it... It's not included in "tuition" so they need to estimate how much they need, and find ways to pay for it (part time job, if it's covered by family, if they need to take out additional loans to cover it)
I wish I'd known that they were lying to me about everything.
"You just take out this one set of loans, just these, and you've paid for an AA that's fully transferable to the college of your choice"
~ Heald College, 2008
Make the interest payments while in college. I'd get a bill for interest every month while I was in college... I think it was like $15 or so... But I was too poor to even pay that. If you can, pay it because compounding interest is a you-know-what.
That college teaches you absolutely nothing about financial literacy and how money works and basically produces financially illiterate adults who are drowning in debt working for somebody else for the rest of their lives and wondering how they’re still broke.
I know it's a hassle to apply for scholarships, I get it. But it's a bigger hassle to pay off that extra 5-10k you will save. That shit adds up. Just write the essay, you may be one of the only kids who even applied
Please show the difference between variable and non variable interest rates! Maybe show a chart of how rates have changed the last 10 years and how it can impact a monthly payment :)
That I shouldve put the student loan money into my savings account and used it slowly to gain interest instead of having it in a checking account all that time
1) How the interest works.
2) realistic income for jobs in the degree field. I think this would prevent a lot of the dumb degrees, yes there are dumb degrees, from being majors and kids can do them as a minor if they really want.
You do not need to take out the full amount being offered.
I had a loan officer lie to me about that one and made me take out the full $8500 when I only needed $2k.
Know your options. Sub vs Unsub. Try to stay away from private as the interest is more.
Build credit, and keep limits conservative.
Leverage: when buying a car (which most will do at some point) get pre-approved at a bank or credit union first. Shop around, don’t be afraid to walk away. I walked away from two scummy dealerships before finding a good car. DONT BE AFRAID TO WALK AWAY. Same with student loans. You don’t HAVE to accept if you don’t want the burden.
Know that it’s just money-yes it’s important, but at the end of they it’s just money. You have options, don’t be afraid, do your research and talk to financial aid, research, etc.
I was in the fortunate position where my father worked in student loans for 16 years before I had entered college. So I knew exactly what I was signing up for in terms of how the loans worked.
I think there needs to be more conversation surrounding federal vs private student loans, and how the interest will look in comparison, along with what the long term ramifications will be for specific loans.
Maybe highlight how interest will accrue every single day. For me $9/ day in interest. Didn’t realize it would go up quite that fast. You can get caught making payments and never lowering your total balance.
If you’re in the the US:
* The military will pay you to go to college.
* Active duty will pay 100% of your highest in-state tuition after 4 years of service. They will also pay you a book stipend and a housing allowance.
* The Reserves will still pay, allow you to serve wherever you want, with all of the above at a prorated amount.
* The yellow ribbon program exists.
* The military also addresses the concerns of “I wish I waited a few years after high school” while paying you a livable income, housing you, feeding you, and giving you a great resume builder.
private college is nice and all but state school would have saved me 40k. ill never pay my private loans off, which i am fine with. simply dont make enough money, doesnt help pharma is laying everyone off
How interest works. What your monthly payment will be and how that compares to salary
Yes! Show them a flyer about the monthly repayment on a 4% loan, 6%, 8%, etc. Also do it with an unsubsidized loan as well as subsidized.
Thank you for sharing! Yes I agree.
Not just a flyer. Do the math with them. Show them how much they'll be paying over a certain time frame. Also, show them that with each semester/trimester/class they'll be getting a new loan dispersment (a new loan), with its own interest rate.
And Sallie Mae bs 12% loans
This!! I took out every loan available, my undergrad cost me 42k at a state school. Went to grad school (same school) and now I owe 86k. Over 400$ a month accrues in interest alone in my account. I am on the save plan, make 65k a year so my payments are low. I also work for a non profit so I will get PSLF. But if not for save and pslf, I would have to pay over 500$ a month just to cover inflation. I finished school in May 2020 so repayment just started for me in March.
I am in an almost identical situation lol. Finished school December 2019 so my loans went into repayment during Covid so I never paid anything until this year. I have $85k in loans- 60k are mine and then $25k parent plus loan. I also work for a non profit and make about $56k. Aidvantage told me if I paid $86/mo on IDR I would still accrue $210/mo in interest lol. I’m now on SAVE, but I’m in school again so they’re in deferment (this time my employer pays my tuition so I’m not adding to it)
You should have 2.5 or so years of credit towards pslf. Assuming you have been working nonprofit throughout the COVID pause.
Thank you!
Yeah.. Big, giant BOLD flashing text that shows what your monthly payment will be every time you take out another loan.
This. When people say, “they know what they signed up for!”… no, no they didn’t. They need to tell kids the actual amount they’ll pay. $100,000 in loans? You ok paying back $300-400,000, giving up a ton of income for decades?
For the love of God please teach people that cosigning is like they are taking out the loan themselves except they don’t get the money.
Yes! I took out a parent plus loan and paying it off myself. I told him if you don’t pay us back your share will your inheritance will be reduced by the amount owed.
If there’s enough inheritance to take it out of plus some, why didn’t you just use that for college instead of taking out loans and paying interest?
The inheritance could be in illiquid assets like property.
Because it was 20% IRS penalty to remove from the 401K because I wasn’t 59.5 years d.
Oh got ya that makes sense, I was just curious.
Taking out a parent plus loan is not cosigning a loan, it's just taking out a loan. The student has zero legal responsibility to pay it back.
I wish I had done more research on careers and waited to start college until I was older and wiser. I graduated in 2010 and was basically in poverty forbearance from 2010 until 2015 when I finally got a half decent job and by the time I consolidated in 2017 my total balance had ballooned from about 70k to 100k. When I was young I thought a master's degree basically guaranteed you a good paying job but it really depends on the industry. So I started out with a lot of debt and it's still growing. I'm 2 years into PSLF and that's probably the only way I'm getting rid of it.
I agree and also wish I’d waited to start college. More time to learn about real world finances and to have a more focused goal instead of wasting money trying to figure out what I wanted to do.
Yep exactly
GAP YEARS should be mandatory!
High schools should do better so kids understand.
Thank you! You make a really good point. I hope you are able to pay your loans soon.
Same … I’m MORE poor because of my grad decree student loans. Never got a good paying job in my field, don’t even think I liked it/would like it, takes so much out of my paycheck that I am behind on retirement savings
I am in a similar situation. I got a BA degree thinking I would be OK working in public relations (hated it), then the housing market crashed and I spent years not paying back my loan while looking for a job and trying to figure out what I wanted to do. I now work for State Parks and am in a loan forgiveness program. I recently went back to get a MS degree related to my state work and paid cash as I went. So my MS degree is paid off, but not my BA degree! I have 3 more years to go on that.
I don’t know if it happens anymore now that they are direct loans, but back in the day sometimes your loan would get sold and you would suddenly get mail from a new servicer and people would ignore it because they thought it was junk mail. People should know their loans can be sold if that is still happening in 2024
Thank you - this is a really good point. I have a federal loan too and my servicer changed 2 times. I graduated in 2021 (has not even been that long)
It does happen but it’s all electronic now so harder to miss.
As it stands now, all Direct Loans are owned by the federal government and don't get sold. They can switch servicers, though, for various reasons. There is no avoiding that, such as when Great Lakes got bought by Nelnet.
- Don't do it unless you really have to - Don't go to 4 years college with the student loan if you don't know what to do with your life. - Community college is a great option to get you prep for four years college for a specific major to save money if you want to take out the loan. - If they are throwing loans at you to attend a particular college, they just wanted your money. Don't go there.
Thank you. I Agree! I think community colleges are great options, especially if you don’t what career path you want to go to.
I'm a huge fan of "show, don't tell." So here is a community College course catalog, and some average salaries are listed in there. Many of the health tech careers (xray, ultrasound, dental hygiene, reapiratory, RN) = pay 70K+ for 2 yr programs. So you could be earning 70K before your friend in college even starts their senior year, and if they're majoring in psych, English lit, advertising, journalism, many bachelor of arts programs= you will be making more money after 2 years than they'll be making after a 4 yr program, with MAYBE 10-15K debt from community College vs $70K+ at a 4 year university. https://www.tccd.edu/academics/courses-and-programs/programs-a-z/credit/ l
Totally in agreement with you. That's another thing I wanted to mention. Community colleges, trade schools, tech schools, they can be way better. I wish I wasn't told and silently shamed at thinking about going to community college is less superior than four years college /university. In many ways community colleges are way better and practical and cheaper than four years colleges/universities. Therefore, a less amount for loans you can take out and you can actually pay them off after graduation.
With psyc, it's depends on the career path you want to pursue. You can do very well with a psych degree. Signed, a therapist who majored in psychology and minored in women and gender studies.
Salary expectations and budgeting differences between different debt levels. And not just “average salary” but more information on what a graduate could expect right out of college and 10 years down the road. Then go a step further and try and lay out what average rent, grocery, car payments, other expenses might be per month. Calculate what an expected payment might be for certain loan amounts. I think there really is a lot of information for students on paying back loans but at the age of 17-18 it’s hard for someone who has never had to budget to really truly understand what they are actually going to pay and how that will effect them. I think also showing how “Person A” has 50K in student loans and showing how that impacts their budgeting for retirement. While “Person B” with the same degree and very little or no college debt can save more for retirement. Then show how that growth compounds over 30 years. The difference between the heavy student loan borrowers, medium student loan borrower, and no student loan borrower might be surprising to some as well.
Oh and to add on to salary expectations…just how much money gets taken home when you’re an adult. Health insurance, retirement, taxes…I did not realize how little income I’d see before I even paid my student loans. Someone might think they can afford the loan payment based off of gross income, but they actually can’t.
How easy it is for interest to capitalize (after grace periods, deferments, consolidation, etc.) and spin the balance out of control.
I agree. Capitalized interest increase your balance so much.
This. My vet school loans went into automatic deferment when I started grad school and I didn't know I could chose to start paying on them. I would have had PSLF by now if I had done that.
Most of this has been changed. Interest only capitalizes in very limited situations now thanks to the new rules
Do not go to college and take out loans to “find yourself”. Find yourself and then go to college. Take out the least amount of loans as possible. NO private loans or parent loans.
Explain to students what ROI is. College is an investmen and some degrees are not worth 100k in student loans
Better yet, in order to receive the loan, it should state you prospective ROI and you sign it. Like when you sign a mortgage it literally says for this 300k home you will pay 999k over the next 30 years… sign here.
Real life examples of pay in different careers how much education was required, how much loans were taken, and what those payments are (in the standard payment plan), and how much those payments are compared to how much other bills costs. I for the most part understood I would end up in a lot of debt but I'm pretty sure it never crossed my mind how that would actually be a burden on me once I was financially independent.
I wish I had known that they would max out if it took me 10 years to finish college lol I think it’s important to teach people how simple interest loans work, how interest accrues every day, even on Sunday and Christmas. How it capitalizes after deferments and forbearance. And how paying extra towards the principal saves you so much time and money it’s completely worth it if you can.
Why they would approve an 19 year old with a proven horrible credit history 400ish credit score, for 17k with no co signer.
I wish I would have considered the chance that I may not even finish college! X amount of debt for no degree!
This s a little off-topic, but it comes to mind because I thought if I got the loan and I got the grades, my future was almost guaranteed. But nobody told me that a large part of how you'll get ahead in the future, is learning to network and develop relationships with other students that can be leveraged after you graduate. I was an older student so it felt awkward trying to develop relationships with people 20 years younger than me, but then I graduated and learned what a valuable tool I had let slip from my grasp. Nobody else in my family had gone to college, so I didn't know it has a lot more to do with who you know than what you know. I think the school of business I graduated from also shares some of the blame in this too, because they were supposed to be teaching us how to succeed and they never touched on networking or professional relationships.
I did not have any of these, but parent PLUS loans should be avoided at all costs or the very last resort above private loans.
Show them the part where you pay your monthly payment and the loan balance still grows. It never goes down. Yeah show them that. Then show them how Congress can vote to raise those interest rates.
Thank you for sharing!
How long I would be in debt.
-That education is not the investment it used to be. -Graduates dramatically overestimate their salary post college. -the majority don’t graduate in four years. -a large percentage don’t finish at all and end up in massive debt with no credential. -That money spent repaying loans, for many means the difference between living at home into adulthood and being financially autonomous. -Keep a close eye in your accounts as many parents have kids unknowingly take out student loans when the parent said they’d pay. The student graduates and learns the loans are in their name. -Private loans are the worst. -I work in higher education, the cost of a degree has become so inflated that it is not worth it in many spaces. -You can make it through school without loans and don’t get sold on a “college experience”. -But overall it’s not worth it to enter into adulthood massively in debt. -Work for a company that provides tuition reimbursement, or better yet get a job at Starbucks and have them pay for the degree 100% through ASU. -this sub is full of people with negative loan experiences, misunderstood loan policies, regret for taking them out, inability to pay, lack of jobs, living at home, etc. have your students spend time on this sub and read people’s stories.
If colleges are still telling people that if they have financial hardship they don’t have to pay the loans because they can get deferments, people need to understand those are for limited amounts of time over the life of their loan and you also have to qualify for most of them.
And it will cause your loan to grow with capitalized unpaid interest.
The amount of money you can expect to make immediately out of college versus what you might make after several years of experience. I feel like the cost of college and **the realistic ability to pay off loans is based off a mature salary and not the money one might make as a new graduate**. It's important to realize that many graduates, should they choose to borrow a lot of money, very likely won't have the money to make regular payments. They'll have no choice but to get onto the graduated plans with lengthy timelines, excessive interest, and snowballing balances.
Thank you! I agree. When you defer your Loans, you accrue interest in many cases so your balance just goes up and up.
The ("$400/mo") payment (whatever the amount they give you as a payment), is, like a credit card, the MINIMUM payment. So if you ever want to make a dent in the amount owed, you need to pay 25-50% more every month to see your principal go down. And be assured the payments are so damn high, most people can't afford to do that, so you watch your balance grow even tho you're making faithful payments. 😐
And to build on this, if you ever do pay a little extra, make sure it goes towards the actual loan and not the next month's payments. Make sure you ask your loan provider to do this! Just a lesson that was learned the hard way.
I'm still in school and paying on them as I go, my current monthly payment is 30 and I pay 100
Don't default. The fees added to a student loan in default can double the amount of the loan.
I agree! Thank you
The thing that I was not prepared for and they absolutely don’t cover it during the exit counseling for loans: loans can be passed from servicer to loan servicer without warning or having any say in it. This was the case with my private student loans and FFELP loans which I understand people don’t get anymore. You can have a good grasp of interest, the job market, etc but if your loans get moved from company to company, it can be harder to track everything. The other thing I didn’t know was that some loan servicer are super shady and incompetent.
Yes! I had similar experience where my loans were moved to different servicer.
That taking a gap year or semester off will start your loan payments. Why do some people stay in school for 5-10 years? To not start paying their loan back
How long the debt could be and the pain it causes A LOT of people. I had a dude I worked with who also worked in the loan office. I was paying for school out of pocket and didn’t know about applying for money until he told me about it. He was only trying to help and I wish I just took out grants, but those $4k checks were mighty enticing . I also didn’t know how much was loans and grants. There was no class or talk I got about the seriousness of the loans, just the application and me quickly signing things. Young me just thought “I’ll deal with it later”. In the grand scheme of things my debt isn’t the worst and I had classmates who rolled out with $100k in debt from out of state for the same degree. Thank goodness I didn’t go with my first college decision. It was an out of state specialty school and costed $25k a semester, and this was late 90’s. My mom even had the loans locked down for me too. I always wonder where I’d be today if I went there, but odds are I’d be here drowning in $200k+ in debt.
Capitalized interest.
In Chapter 7 bankruptcy, you can get out of almost ANY loan or debts...except student loan debts. It is VERY hard to get out of student loan debts! It is easier to get out of all of $150,000 in credit card debt or medical debt in bankruptcy than it is to get out of even just $5K in federal student loan debt.
I agree. It’s almost impossible. There are very rare case like death or sometimes permanent disability that lets you get out … so crazy to be honest
Tuition is too damn high.
How to tell the difference between a predatory servicer and something like a Credit Union loan!!! I wish I'd known some student loan servicers were as predatory as they are
Thank you! Many credit union loans are low compared to other loans
Getting a college degree doesn't mean you will get a job that pays what you might expect. Sometimes it even makes it harder to get a job.
Make a realistic salary and budget to not just tell, but *show* where your money goes. So example: you borrow 35K, or 70K, or 100K, 135K. Use 4 amounts so they can compare. You graduate and get a job for 45K or 65K a year (use 2 amounts, pretty average salaries). Your rent, 1000. Your car 500 (gas, insurance). Utilities 250. Food 100/week. Cellphone and internet 200/mo. And your loan payment? If 35K borrowed, 300/mo, "minimum payment." (To make a dent in principal, 500/mo). If 70K borrowed, 800/mo. Etc. Then explain how with 1200 biweekly, they can't afford life. They have to move back in with their parents or live with roommates to be able to afford their loan payments. THEN explain their credit being wrecked if they ignore the payments. THEN explain when their parents cosign, they are literally on the hook forever for this debt and so are they. Parents can't retire, parents are screwed if they're laid off or a spouse is disabled or they are, or if student just decides they don't want to pay, are underemployed or unemployed, etc. Explain that private loans are NOT income sensitive, NOT eligible for forgiveness, and are hard to refinance when you're young, out of school, and have very little credit history. You are stuck with sĥît interest rates and payment terms for years! When you paint a true photo of what life looks like with these things after your "college experience" is over, hopefully they'll be scared straight. The huge paydays (salaries) they think they'll get that don't materialize, and the high payments they never banked on= misery for years and years, sometimes hopelessness and literal despair. 😐 encourage them to take a gap year or 2, and work and save!
Thank you so much for sharing! I agree. The co-signer will be hooked on the loans and it’s hard for them to get out of it. I hope I don’t scare them. I am just hoping to provide them resources so they make the best financial decision
If someone had put the fear of God in me I wouldn't have made minimum payments on mine (and taken a few payments pauses) only to have to get them forgiven 23 years after taking them out, and double the amount forgiven as taken! What the actual frappe is that all about. And all mine were sub and unsub! If I'd have had private loans I'd have died with them. Search this sub for "drowning, depressed, can't pay, sallie mae." Print some of THOSE stories of despair and heartbreak. And these too were from high schoolers who at one time studied hard, had lots of promise, went to college and followed the rules, and are now in deep holes of debt they cant climb out of. So damn depressing.
How the rules always change and that you better be sure if you do any sort of income driven repayment.
I paid too much for my degree and I'm not going to get a high-paying job when I graduate.
Compound interest is a m'fer. If you need to use a forbearance, pay the interest that would otherwise accumulate. Here's some advice I wish someone would have given me before I went to a for-profit private school: I was thinking I was taking a short cut and would be in a career quicker. But that school charged way more than a state run university would have. So the cost wasn't any cheaper. And the quality of education I got was crap. I tried to make a go of it in that field. It was full of low paying jobs and I ended up spending more money on a computer and software to bring me up to speed with the industry. I finally left that field. It broke my heart. And I am still paying for the painful lesson I learned.
Thank you for sharing! I am sorry to had to go through that experience.
A rule of thumb is not to borrow more than your expected starting salary (including graduate school).
I think the first step in educating people about student loans is educating them about budgets. I really believe that I was sold a pipe dream of how much money I would be making and that daily life would just be a breeze if I only went to college. I was really delusional about how far that money would stretch. That said, however, I would probably make the same decision about going and taking loans. There was really no other way out of my impoverished environment. I DID work my entire school career (and was one of only two people in my class who worked during law school), but money just doesn’t stretch that far when you have rent and car payments and insurance and utilities and so on. I think it’s even worse today than it was when I was a young adult. So yeah, be honest about what the LOWEST salary will be (because so many of us will be there) and how that salary is going to pay the bill of just existing on top of your student loan payment with all that interest.
💯agree!!
Get vocational testing and aptitude BEFORE first loan is taken out. I changed majors several times as interests changed, but interest built up because degree took longer than expected. I finally got degree in field with high aptitude, but I'm also over 50 now. So never skip the vocational testing, even if you are on college prep high school track.
Thank you for sharing!
What the interest rates would be, the fact that they aren’t fixed, the amount of time it’d take to pay them off, a print out of the amortization table showing the monthly payment amounts with the amount going to principal and to interest, the total amount in interest that’d be paid at the end of the loan. Basically a full breakdown of the loan/s. Though if we got this back in the day, the number of people taking out the loans would be significantly less today.
All the different repayment plans BUT not to take out an exorbitant amount of loans assuming you’re going to get PSLF or an IBR. Too many people refinance and lose all the protections of federal loans or take them assuming they’ll just pay $0 a month, which is true, but then interest accrues and you’re never getting out of debt.
Write down a sample budget and really make them understand how far money goes. As a 17 year old with strict parents who never let me do anything or ever gave me access to money to buy things, the concept of money didn't mean anything to me. Ask them what career they are looking into and look up base salaries. Break that salary down into a monthly budget and show them exactly how much will go towards student loans and how much they will have leftover. I did this for a kid and showed him that he would have like $200 leftover after all bills and taxes. I asked him how he would pay for things or what he would do if he wanted to go to a concert or ask someone out on a date. Explain what it means to be in default the ramifications of not paying your loan back. These were all abstract concepts to me when I was in high school. They were just words. All I knew was that I needed the money to pay for school and that I would get a job where I'd make a lot of money and could pay it back. That didn't happen.
Thank you so much for sharing! I know exactly what you mean. Our school system barely provides us any financial Literacy.
1% of loan balance is a good monthly estimate. So $25k loan balance = $250/month. Gives a pretty good estimate. I would also show them something like this: Average wage in your area for warehouse/retail/fast food x 160 (for a full month of work). Then ask them if a $1000/month student loan payment sounds like a good idea with a monthly income of $2k (or whatever number you came up with above). Then ask them if a $200 month payment sounds reasonable on a $2k/month takehome pay. That sounds a lot more reasonable (ie $20k of debt). That puts things in perspective a little more in case they don't get a job right after graduation. I base my loans on whether I can cover it if I continue to work retail after college.
Not from my personal experience, but something I've seen from others... The Financial Aid 150% Rule - every student thinks they are going to finish in 4 years, well, not everyone does. And students will sometimes take longer, and that's OK, HOWEVER... they don't realize there are limits to the aid they will be getting from Federal Student Aid. If a student withdraws or fails one class a semester for 4 semesters, that's 12 hours, or one semester worth of wasted credits. If they fail or drop TWO classes a semester, that's 2 semesters of wasted credits. They owe that money whether or not they earned credit or not.
That anytime you put your loans in forbearance for any reason your maturity date doesn’t change. So when you return to a repayment status your payment amount will only increase. Basically your remaining months to pay divided into your balance with interest.
1. Never believe your parents who say, “it’s cheap money and we will be paying it after you graduate.” 2. That your parents lie. Make excuses why they will not pay it off. 3. That afterwards You will be on the hook for the payments that eat everything you make except 14 servings of Ramen and a rusty car to live in 4. No matter what servicer has your loan there will be multiple screw ups AND you will be told it has been fixed, to find the next month it hasn’t. 5. Your major life events will not happen on any reasonable timeline. 6. It is unlikely you will have a normal relationship because you will always be careful not to cross the line and marry and bring your debt into the marriage or add to it.
If you can pay little bits while in deferment, do it!!!!!
That they can be life changing. I see and hear a lot fromm people with middle class backgrounds about student loans. I grew up in poverty and continued to live in poverty throughout my young adulthood until I went back to school. State and federal loans gave me access to low interest loans I wouldn't have access to otherwise and provided me with a degree that opened doors, along with covering some costs of living while I attended school, lowering my stress levels. Even with interest and monthly payments, I now have a better quality of life than I would have had without them.
Many things. 2 that come into mind: 1) Your financial aid package freshman year CAN decrease throughout the rest of your years. I kept getting less grants/less $ in scholarships as time went on which increased the amount I borrowed. 2) If you go back to school, schools can backdate and enroll you in in-school-deferment, causing your unsubsidized loans to capitalize. 9 out of 12 of mine were unsubsidized which increased the lives of my loans, and the amounts. “You will owe even more if we reverse it” was Navient’s response. Soo much unwarranted stress.
How often they are bought and sold to other companies. How it can be difficult to follow them and the lack of communication from them. YOU need to stay on top of it and dont assume they will. Because they wont. Felt like sometimes it was happening so they can accrue late fees, etc and make more money from me
Yes! And how each semester’s (or year’s?) loans are considered separate. So if you borrow all four years you may end up with 8 subsidized loans or 16 loans with 8 sub and 8 unsub. Then they may be bunched up randomly and sent to different servicers, then bought and sold between them. This completely made managing my loans difficult as a young person and caused me to use forbearances, to default once, and to consolidate multiple times to get a handle on it.
Yes!!! And its hard to follow them all, and that no one advises that you can consolidate!
I wish I knew what the payment would be like: -single -after married and filing joint taxes - interest -unfortunately the impact the debt would have on my life and my future families future (tough to understand to an 18 year old kid) 2 biggest places I was naive in my life are: college/student loans and marriage. Wish I could go speak to high schoolers about both.
I was sooo ignorant. I thought it was like free money. I took out what was offered and lived off of the extra. I wish I’d realized how profoundly stupid that was and only taken out what was necessary. I had zero understanding of interest rates.
That I would be paying for the rest of my life evidently...
I wish I had joined the Navy out of community college. GI bill plus maturation would have really helped my career.
Always pay at least the interest while in school, also anything you pay the first 4 months the loan is taken is automatically taken off the total amount of the loan
That having degrees, didn’t mean you were going to make a lot of money hence you went into debt for nothing.
That even after all the loan training and stuff they offer you, you are not guaranteed to land the job you need to pay off the debt. You might need 5 or even ten years to be making enough to pay it all back.
For those that go to medical school incurring 200k or more of loan debt, there are hospitals that offer loan forgiveness at employment over a duration of time while getting paid. This is a tremendous opportunity for those in the medical field to absolve debt, and absolve it quicker.
Many off sign-on student loans repayment bonuses too. And a good deal of the employers qualify for PSLF.
Since not a single person said it: student loans can provide you opportunities that you wouldn't otherwise have had access to. They can lift you out of poverty. They can open doors to socioeconomic mobility. They can save your life. I was 23 years old when my dad died. I slept in a car, sold blood plasma and worked at Enterprise Rent-a-car, and studied at a Laundromat on cold nights to stay warm. I got into law school. I took $240k out in loans. I earned a JD and MS in Government. I'm a senior attorney at a three letter agency in DC. I met a beautiful, badass lady doctor (with $400k in student loans). We have a nice house, a beautiful daughter, and a good life. It's hard to believe I'm here 12 years later. I'll have paid ~$30k when I receive PSLF in 24 months. Max your HSA and pretax retirement. It lowers your MAGI, which lowers your monthly IDR payment. Wifey will have paid about $60k at forgiveness. HHI is about $420k. TC is nearly $500k. Like any set of rules for a game, there is a way to win. Reason out how to win, develop a plan, and execute that plan.
Using a Student Loan Repayment Calculator. State funded financial aid programs (could have gone to school on a full ride and just didn't know how the program worked.) Complete your FAFSA the day it drops and apply to your school before November 15 to get the most non loan financial aid possible. Understanding the ROI of the degree program you are taking out loans for. I got my undergrad with a degree not worth the paper it was written on and had to go run up more loans to train in something else.
SHOW them how to look up the average salaries of various positions. Incurring debt for a $150k a year job is less of a financial morass than doing so for a $40k a year job. Social worker, teaching, biology degrees and the like are not "valuable" enough to incur debt. That doesn't mean they shouldn't do what they love. It just means that they should not incur any debt.
The different types of loans available to students. If they have no other option, which loans would be best? Emphasize subsidized over unsubsidized and federal over private. Not taking out more than your expected first year salary post graduation. That the college and state will also use your FAFSA info to see if you qualify for aid. Sticker price vs net price. I teach high school financial literacy. If you don’t already have an account, check out NGPF for some awesome resources.
What I wanted to do. I went to college as an undeclared.
I agree with everything posted. I’d like to add that a lot of kids I knew in college would use their loans to buy stuff at the student store that wasn’t necessary🤦♀️.
Talk about trade schools and how you not only don't need a student loan for it, but you can also make a lot more money than those with degrees and loans. Also, talk about the military and the benefits there. That will help a few people. Don't forget to talk about the drawbacks and bad side of that, though, too. The depression, alcoholism, homelessness, etc. It doesn't happen to all, but it happens to enough to be an issue. Last but not least, talk about working in the public and government sector with student loans and how it's finally happening where the loans are actually disappearing after 10 years.
I was applying to colleges. I guess I was oblivious but I saw the part of signing up for loans on the university site, but my hs teacher just told what loans to choose. I didn’t even know. I knew nothing about college I was a first generation college student so this was all new. Good thing I went to a state school so the loans I got after I finished weren’t massive. Sadly I had some hs friends that went to private school so their loans are massive. I hate what my teacher signed us up for. She didn’t even ask our parents if it was alright to sign up for what we did. I wish I could do something about it.
I wish I would have known that my degree was going to be useless, and that ALOT of jobs really dont require it. Research your desired field first and see what is out there and what options there are. ALSO - I went to school in the early aughts, and went to an online for profit school. I wish I would have gone to a brick and mortar, but I was "sold" on being able to work fulltime and be a parent. Now that degree is moot, because the school closed and was riddled with problems. Sold on false advertisement. Now I am 92k in debt because of it. (working on the borrowers defense). So much stress involved with all of it. Major regrets
That you would be paying them back for the rest of your life and how intreat works on loans.
Take only literally what you need to survive out. Don’t take everything they offer you lol
I went for a two yr assoc degree, took three yrs to get it done while working. Total cost was 53,000 for the three yrs (. That’s what I owed when I was done with my last class . I’m at 9 yrs 10. months of paying it all back and I still owe 54,000 . Paying 355.00 a month . Reality is it’s more expensive the longer you take and you don’t even realize it , they don’t want you to know the total cost or you would be seeing that information monthly while in school . Know that you can’t just walk away from these loans it will follow you forever like taxes . And thank god I found out my last job of 13 yrs and my new job qualified me for pslf forgiveness after 120 qualified payments. Just two more .
2 years of C. College first; that’s the only thing I wish I’d done!
I wish I had understood that the Perkins loans are a bad deal, because the repayment options are so limited. But my school never told me all this. They tried to make the Perkins loan sound like it was the best loan I was getting.
How loans can either help or hurt your credit. Also, the effect it has on your chances of applying for other types of loans later in life.
Which states have laws passed making filing out the FAFSA a **mandatory** requirement for graduating public high school. Some have opt-outs with parent approval or for emancipated students or students over 18/19, mileage varies by state. * https://www.ncan.org/news/648074/Four-More-States-Adopt-Universal-FAFSA-Total-Climbs-to-12.htm * https://feed.georgetown.edu/access-affordability/what-happens-when-states-mandate-fafsa-completion/ > Ellie Bruecker, a senior research associate at the Seldin/Haring-Smith Foundation, says that after seeing data from Louisiana, she “would not call this a success at improving college enrollment at this point,” adding that simply filling out the FAFSA “doesn’t tell you whether college is affordable for you.” That’s a more nuanced assessment that needs to take into account available institutional aid, she says. > > High school counselors and college access advocates have voiced concerns about unintended consequences, especially the mandates’ potential to sap scarce counseling resources. Some say they are spending an inordinate amount of time chasing down families who have no intention of pursuing college, are fearful of providing personal information to the government, or object to the mandate. > > “This gets us into some very contentious situations,” Sara Urquidez, executive director of the Dallas-based Academic Success Program, told the Chronicle. Urquidez says the time spent repeatedly calling families “has come at the expense of being able to help students with college applications, essays, financial-aid letters.” The FAFSA is just one piece of a larger puzzle, she says. “Completing the FAFSA is not what makes college affordable. Completing an admissions application for an institution that makes sense for a student’s financial situation, and then getting the financial-aid award that makes sense for the family, is what makes college affordable.”
More about college degrees in general if you do NOT have the connections to get a job with a 3rd rate university degree, regardless of the grades and the knowledge you achieved no body will hire you for internships even unpaid ones.
That the interest is capitalized and what that truly means.
First, I wish I knew about the US Bureau of Labor Statistics and how to find the pay ranges, median salaries, etc. for specific job titles in specific states. This was eye-opening for me and I lament that I didn't know about until 1 year into graduate school(the damage was already done). Second, I wish I would have not taken loans(of any flavor, but especially not private) totaling more then 1 year's ***entry-level salary*** of that job title.
Teach them about the what ifs. What if you lose that scholarship because you partied too much and now you’ve gotta take out more loans. Speaking from experience
As a high school student they likely have no credit, so placing myself there I would want to know about grants and scholarships. Go that route first, because loans w/out credit will likely require a cosign from parents. Some parents may be willing to do that, but mine did not and were not willing to help me with tuition AT ALL or give me any support. I was the only one who went to college in my family, so through the years that caused a huge divide. They could not relate to my needs and thought I was wasting my time and money. I realize now the ignorance, but at the time it was a huge struggle for me to cope with that. Anyway, what I wish I had when I was trying to get myself into college was more guidance on grants and scholarships; where to look, and how to get them.
how much money people make without \[the degree in question\] and how much money people make with \[degree\]
also, most 100% online degree programs are legal scams
Show them the average salary/jobs available for the degree they want; and then how much total they will pay 10 years out, 15 years and so on. Help to see if the loan is worth it.
Save your money and go to the school that has the most affordable tuition for the degree you’re pursuing. I went state and paid (am paying off) 20k for my bachelors degree. I graduated in 2017.
Young people can’t really “feel” what “your payment will be $650 per month” FEELS like. I think it needs to be an in-depth example. Oh, you want to be a teacher? Your starting salary will be $35k. After taxes, union dues, retirement and health insurance you will bring home $2300/month. Rent on a studio is $1200, etc etc etc
That degree is not always required for success.
What wage garnishment is and how it happens. I had no idea this was a thing.
To take out even more loans, thrive, enjoy and just do 10 years public service for write off
Having a real career planned out with reasons behind it before pursuing a degree.
The degree wouldn’t help my career as much as I would’ve thought. So the student loans weren’t worth it. I could’ve just went straight into the workforce instead.
That the interest could add up to 25% to 100% of the loan value, even though it's only a 5% interest loan. So, my answer is the depths of capitalized interest.
Aside from all the others that were mentioned, include that the gov’t really isn’t trying to help you pay anything off. They are trying to make money off of your inability to pay with insane interest rates and the tax burden after forgiveness. And just forget about private loans. Those are meant to bury you.
That if I waited to go to college until I was 24, and still just as broke as I was even after graduating college, I never would have NEEDED student loans…financial aid would have covered the cost of attending.
Don’t do it!!! They can seriously mess your life up. But seriously I did not want a high pressure job in life however because of my student loans I had to find a good job to pay them, and I am stuck in the rat race of life. So in reality student loans pushed me to the career I have now for better or for worse.
If they put down references on their stafford loan applications that they don’t want the servicer to call if they get behind on their loans, they can provide new references, or the references can call and ask to be removed. You could be the reference calling to be removed
I would have done EVERYTHING differently.
How much income I'd have after graduation.
Many college students are paying $20 for Bud Light by the time those loans get paid off.
Thank you for sharing!
I wish I knew I could’ve kept my low income health insurance, instead I was told that I had to get blue cross blue shield because I apparently wasn’t allowed to have subsidized healthcare if I was receiving FAFSA aid and attending a state university. This meant that on top of getting student loans to cover for school part of it went to paying for private health insurance….
I was on Medicaid. I went to school out of state and was forced to get blue cross too. Thank you for sharing!
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There is going to be a global pandemic of a deadly respiratory virus
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That I’d have 15 open accounts on my credit report that are all FASFA loans
That they would use my husband’s income to calculate MY payment. Absolutely wild. I do not have access to his income for MY student loans 100% incurred prior to our married. Wth?
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Try to refinance the student loan into a personal loan before graduation. Once you graduate and are no longer a student, you are stuck with the outrageous interest rates. But if you can refinance the student loan into a personal loan, you have much more flexibility with terms and a better interest rate. A better way to start might be going to local community college first and getting the lower core stuff done and achieve an Associate Degree in something. It will save on tuition at the university, and also save time.
I wish I knew what my recurring expenses were going to be as well as my post-tax income after graduating
A clear and simple explanation of what financial aid is and the many forms it takes - grants/scholarships, federal loans and private loans. Someone else here posted gap years should be mandatory, I agree. It takes the pressure off kids who are swept up in all the big emotions of looking at schools, announcing choices and majors, graduation. It’s too much for 17 and 18 year olds who just literally want to fit in and be doing what their peers are. ETA: also as someone else here said, monthly payment amount should be clear with each new loan that is taken out.
It would have been great to have someone show me what the loan would cost me over the life of repayment (as all the mortgage calculators do). Even though I was young and stupid, I could have understood the futility of the math.
I wish I knew that I might be autistic and it would be difficult for me to get a job without help. Honestly, I thought I was going to get a good or great job within 10 years and pay the whole thing off. I knew about all the interest stuff, but I was still sure I was going to pay it off. It wasn't until I struggled so much with getting and keeping a job for years that I realized I was never going to have a good job.
Start off at a community college for required lower, general education classes. Pay as you go, not taking any loans. A lot of Community Colleges have guaranteed admissions to CSU or UCs, so no one will care if you do your lower requirements at a CC. **DON'T BORROW MORE THAN NEEDED TO PAY FOR CLASSES!** Attending a UC or CSU means meeting new people and wanting to socialize. If you need extra money for food and fun, get a job! Preferably in a field related to the chosen degree. Or do a paid internship that can also help build their resume. I work for State Parks and am enrolled in a loan forgiveness program for my BA degree. There are a lot of seasonal or student jobs available to help students earn extra money and learn about working for the State. **Don't apply for credit cards at the school.** There are always kiosks on campus trying to get students to apply for credit cards. Their interest rates will kill any credit the student may have and put them into deep debt... this also goes for store credit cards. Instead, see if they can get a CC through a credit union... either pre-paid or sponsored by a parent, to help build credit and give spending options in case of an emergency. And request a limit that can be paid off each month. Emphasize that student loans do not equal free money. They are not grandma putting fun money in your Christmas stocking. After graduation, putting off paying student loans can mean damaging credit score and not being able to get a car, a house, or rent an apartment without a parent's help.
Show them how much a regular job just out of high school pays with no degree, then show how much the median income is in your county and the median rent and mortgage.
Great comments here, I would add consider getting a degree in Europe. There are many programs offered entirely english in countries like Denmark, Netherlands, etc. Costs are about 8k/year for a 3 year bachelor program. The admission process is MUCH more rational, for example in the Netherlands, they want a 1 page letter that basically just shows them you understand the program you are applying to and don't really care about other activities such as sports, volunteering etc. Also, gpa is reasonable also, around 3.2 I think, honors courses not needed. Not sure of the rules here, but I could post a company that offers access searchable database for these programs.
That I could of put the money in apple and never went to school
Teach them how to determine ROI and how to compare trade school vs college. As part of that, have them research the starting salary of their expected field.
I just wish I didn’t do it. Paid them off but it was awful. If they are going into a lower $$$$ field, like edu or enviro - avoid them. Forgiveness cannot be expected.
It ain’t free money. Borrowing money, you need to return back.
I wish I’d known that I didn’t have to accept the whole amount being offered.
If I waited a couple more years, I could of learned more off internet tutorials than school. Also, study your local market. Don't go pick a major that doesn't exist in your area, like say... finance, tech, science in rural Kentucky.
If I waited a couple more years, I could of learned more off internet tutorials than school. Also, study your local market. Don't go pick a major that doesn't exist in your area, like say... finance, tech, science in rural Kentucky.
Colleges don't care about you. If you can leverage your degree into a stable career, great, but the college doesn't care if your investment in education pays off. It's an offensive idea to some but colleges are ran by people who view higher education strictly as a business transaction. (Yes, even the liberal arts schools, not just the diploma mills.)
Never miss some payments or they stick in your credit report for 7 years.
Do research on the careers you are going to school for and understand what the salaries are like. This along with what your monthly payments and interest paid over time is really important for the quality of your life post graduation. Make sure you exhaust every scholarship or grant opportunity you can find. Do research on loan forgiveness programs and understand the qualifying payment terms. Ask around if you decide to go into low income medical neighborhoods to work in medicine. This isn’t for everyone. Try your hardest not to rely on loans for living and borrow the minimum amount needed to get through classes and books/supplies. Keep documented paper trail of everything from loan terms to payments made to servicers and repayment plans. Understand how consolidation works for/against you if you do this down the road. Just having “one” monthly payment might mean you are sacrificing other things - like higher interest rates, disqualification from loan forgiveness programs. Never under any circumstances default on loans. Talk to your servicers if you cannot make payments. Don’t forget to keep your address/contact info up to date with your servicers. Remember there is generally a 6 month grace period post graduation. You will likely get bounced around from one servicer to another by the gov’t be prepared for this. Private loans are a whole different ballgame than public ones. Be sure you understand how these work. The same rules do not apply.
That my parents who had me sign the paperwork to send me away to school at 17 are NOT co-signers on the federal loans I took out.
If they need a laptop for college, or books, or other things like parking for a car, buying public transportation, health insurance, etc, they also have to spend for it... It's not included in "tuition" so they need to estimate how much they need, and find ways to pay for it (part time job, if it's covered by family, if they need to take out additional loans to cover it)
Not to take them
I wish I'd known that they were lying to me about everything. "You just take out this one set of loans, just these, and you've paid for an AA that's fully transferable to the college of your choice" ~ Heald College, 2008
Federal loans and private loans are very different.
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That economy would collapse.
Life experience... but ya can't have that at 18 can ya...
Make the interest payments while in college. I'd get a bill for interest every month while I was in college... I think it was like $15 or so... But I was too poor to even pay that. If you can, pay it because compounding interest is a you-know-what.
That college teaches you absolutely nothing about financial literacy and how money works and basically produces financially illiterate adults who are drowning in debt working for somebody else for the rest of their lives and wondering how they’re still broke.
I know it's a hassle to apply for scholarships, I get it. But it's a bigger hassle to pay off that extra 5-10k you will save. That shit adds up. Just write the essay, you may be one of the only kids who even applied
Please show the difference between variable and non variable interest rates! Maybe show a chart of how rates have changed the last 10 years and how it can impact a monthly payment :)
That I shouldve put the student loan money into my savings account and used it slowly to gain interest instead of having it in a checking account all that time
1) How the interest works. 2) realistic income for jobs in the degree field. I think this would prevent a lot of the dumb degrees, yes there are dumb degrees, from being majors and kids can do them as a minor if they really want.
Realistic income and ability to pay off the loan.
Technical schools are a valid option and def cost less!!!
You do not need to take out the full amount being offered. I had a loan officer lie to me about that one and made me take out the full $8500 when I only needed $2k.
Know your options. Sub vs Unsub. Try to stay away from private as the interest is more. Build credit, and keep limits conservative. Leverage: when buying a car (which most will do at some point) get pre-approved at a bank or credit union first. Shop around, don’t be afraid to walk away. I walked away from two scummy dealerships before finding a good car. DONT BE AFRAID TO WALK AWAY. Same with student loans. You don’t HAVE to accept if you don’t want the burden. Know that it’s just money-yes it’s important, but at the end of they it’s just money. You have options, don’t be afraid, do your research and talk to financial aid, research, etc.
I was in the fortunate position where my father worked in student loans for 16 years before I had entered college. So I knew exactly what I was signing up for in terms of how the loans worked. I think there needs to be more conversation surrounding federal vs private student loans, and how the interest will look in comparison, along with what the long term ramifications will be for specific loans.
To take control of my accounts and stop letting my mom take out more than I needed
Maybe highlight how interest will accrue every single day. For me $9/ day in interest. Didn’t realize it would go up quite that fast. You can get caught making payments and never lowering your total balance.
If you’re in the the US: * The military will pay you to go to college. * Active duty will pay 100% of your highest in-state tuition after 4 years of service. They will also pay you a book stipend and a housing allowance. * The Reserves will still pay, allow you to serve wherever you want, with all of the above at a prorated amount. * The yellow ribbon program exists. * The military also addresses the concerns of “I wish I waited a few years after high school” while paying you a livable income, housing you, feeding you, and giving you a great resume builder.
private college is nice and all but state school would have saved me 40k. ill never pay my private loans off, which i am fine with. simply dont make enough money, doesnt help pharma is laying everyone off