lifehacker.com: Hi everyone, I'm Holly Mangan. I'm the managing editor of Money Crashers, a personal finance website dedicated to educating readers on better ways to manage finances. We cover everything from reducing monthly bills and choosing the best cash back credit cards to planning for retirement and preparing taxes. Today I'm lending my expertise on student loans and credit cards
3 comments:
Loan debt sucks.
I am constantly amazed by how much college costs and how much that debt can balloon out of control quickly. The problem mentioned in one of the answers that people can not get a high enough paying job to make their student loan payments is one that continues to come up in many articles on this subject. When a new college graduate has enough debt that their college loan payments far exceed their rent that shows that the cost of school has gotten too high. Also having a college degree seems to have much less of a chance, compared to 20 years ago, of actually giving you a significant pay raise over someone who went directly into the workforce. An undergraduate degree in many fields seems to be the equivalent of what a high school diploma bought you even two decades ago. We allow so many students to get into an impossible financial situation and many universities do a very poor job of helping to place students in jobs after graduation. In the case of some universities they have departments and degrees that need to be shut down because they are charging exorbitant fees and give no help or experience that will get these people employed after they graduate with a mountain of debt. I know that many universities are trying to be profitable but what some universities are doing offering degrees they shouldn't to bolster their profit margins is downright criminal.
I'm happy that this article made it onto the blog, because I know a lot of people (undergrad, grad, and no longer in school) who are still baffled by their loan situations. Most of the comments and questions that she answered were about people who haven't been able to find a job, or who haven't been able to save anything due to loan payments. Her advice for those without savings is to focus on accruing savings money before worrying about paying off debt. This is good advice, but in practice, may not be possible. The minimum monthly payment for loans is $50, and depending on the amount of your loan debt, that might mean you are paying for 25 years and never pay it all off because of the interest rates. What Luke said above is also true, that an undergrad degree isn't worth what it once was, and so incomes have dropped while tuition has skyrocketed. I don't think universities are ever going to be convinced to lower tuition rates, so I'm not sure how this can be solved, but student loans are going to become a bigger and bigger issue for our generation.
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