When Ray talked about graduating with $50,000 in student debt on HBO’s Girls, he was not alone.
Student loan debt in the United States now tops $1 trillion, according to USA TODAY, which is more than credit card or car loan debts, and about 57% of student loan borrowers owe $10,000 or more.
As job outlooks grow scarce — and as the cost of living increases — many college students and graduates are have difficulty finding ways to pay those loans back. According to Andrew Sum, director of the Center for Labor Market Studies at Northeastern University, many people with a bachelor’s degree face a double whammy of rising tuition and poor job outcomes.
The analysis of government data showed at least half of college graduates are jobless or underemployed, median wages for those with bachelor’s degrees are down from 2000 and job prospects for bachelor’s degree holders fell last year to the lowest level in more than a decade.
So, while students and graduates alike turn to a second degree or moving home with mom and dad, other students have taken their financial situations into their own hands.
Allison Stice, 23, is a 2010 graduate of the University of Maryland and one of the lucky 50% to find a job post-graduation. As a crime reporter at the Island Packet and Beaufort Gazette in Georgia, Stice has begun paying back her loans, which totaled $16,000 between her Sallie Mae loan and the loan her parents took out to help pay for college.
“My monthly payment is manageable with my starting salary,” Stice said. “I looked at my finances and what the payments I could reasonably afford and negotiated a payment plan with Sallie Mae. I didn’t want it to be so low that it would take five million years to pay off but also not so high that it would be a struggle to manage each month, especially because I fully support myself.”
Stice is able to pay $85 each month while still supporting herself financially, but for the other half of recent and upcoming college graduates, the answer may not be so simple.
While a number of success stories include large winnings in online poker or selling makeup products, other students have taken a different approach.
Nicole La Hoz, a junior journalism major at University of Florida, has already racked up $19,692 in loans with one more year still to go, but has found her own method to cushion her impending debt upon graduation.
“My dad came up with the idea to pay off interest as soon as possible so I’m not stuck with $20,000 plus fees,” she said. “He paid the first interest payment last December. We set up our loans so that my dad covers the initial cost of interest right away. He pays that 7 to 8 percent immediately, which lets me pay off what I actually borrowed without worrying about accumulating more fees.”
While she is not happy with having to owe money, La Hoz said taking out loans was the right decision for her family.
“I’m stuck in what’s basically financial aid limbo — parents make too much money to qualify for financial aid, but they don’t make enough to completely pay for college. I wasn’t having any luck with the hundreds of local and national scholarships I applied to all throughout high school,” she said. “Loans were a last resort, and now, they’re what’s keeping me in school.”
Powered by Facebook Comments