In debt, forever
How can you cope with $55,000 in student loans on $33,000 in income?


By Tim Jones and Jodi S. Cohen
Chicago Tribune staff reporters

March 5, 2006

Margo Alpert is on the 30-year plan. Every month between $500 and $600 is automatically deducted from her salary to pay off college loans. By the time the 29-year-old Chicago public-interest lawyer is in her mid-50s and thinking seriously about retirement, she will finally be free of college debt.

"It's going to be part of my life forever," Alpert said. "I don't think about it at all because it's just a fact of life."

Alpert's experience with her version of debtors' prison is not unusual in the realm of recent college graduates whose unpaid loan and expense obligations have soared in the past several years, leaving them with debts that can range from double to more than triple their annual salaries.

Because of higher tuition, steady or declining grants and state aid, and a greater dependency on loans, the average student's debt has increased by more than 50 percent over the last decade, after accounting for inflation, according to the U.S. Department of Education.

And as Congress moves to cut the budget deficit, the cost pressure on college students and those preparing to enter university is about to worsen. The era of low-cost loans is ending, and interest rates on many federal education loans are poised to leap starting July 1, because of congressional cuts, adding thousands and perhaps tens of thousands of dollars in new debt onto the long-term costs of a college education.

The rate for so-called Stafford Loans, which represent the vast majority of federal education loans, will be fixed at 6.8 percent, compared with the current variable rate range of 4.75 percent to 5.38 percent. The rate for loans taken out by parents on behalf of their children will increase from 6.1 percent to 8.5 percent.

Changes to federal student loan guidelines, however, will raise the loan limits for freshmen and sophomores.

"Reality will begin to hit for student loan borrowers this summer," said Robert Shireman, executive director of the Project on Student Debt in Washington, D.C. "A lot of borrowers were helped in the past two years by the ability to lock in low-interest rates. That opportunity is slipping away."

The new interest rates will result in payments that are 20 percent higher compared with the 2004-05 rates, doubling the total interest paid over the life of the loan, according to the Project on Student Debt.

"It's very worrisome to our kids. They come out of [undergraduate] school with $30,000 or $40,000 in debt, and then they marry someone with $30,000 or $40,000 in debt," said Karen Foley, president of Scholarship Chicago, a non-profit organization that helps arrange financial aid for low-income students.

"Debt can be character-forming, but we don't want it to be so crushing that they then conclude they can't go to graduate school or that they can't get into a particular profession because most of their money goes to repay debt instead of going into a savings plan," Foley said.

Over nearly a decade, average debt for a four-year college graduate rose from $12,100 to $19,300, with about 25 percent of recent graduates having borrowed more than $25,000 to pay for their undergraduate degrees, according to national education statistics.

A few universities have responded by guaranteeing that students whose families are below a certain income level will not have loans as part of their financial-aid packages.

The impact of big debt from education loans manifests itself in ways that cannot be easily measured. Career plans are altered. Lifestyles are restricted or changed. Home purchases are put on hold. Family plans are often delayed to allow for debt payments.

This is the life of Carrie Gevirtz, a 28-year-old social worker who finished a University of Chicago master's degree in social work last year.

Her debt is $55,000. Her annual income is $33,000.

"I can't afford my lifestyle. I'm not in a position to buy a place. I can't buy a condo and don't know when I would, unless my income changed dramatically," said Gevirtz, who makes a monthly payment of $250 to retire the debt.

Gevirtz supplements her income by baby-sitting for friends and teaching kickboxing at a health club.

"I was not prepared for this. ... It really freaked me out," she said.

Luke Swarthout, the higher education associate for the Washington-based Public Interest Research Group, said the combination of rising tuition and higher interest rates has led to "an increasingly worrisome picture for students," one that affects career and personal decisions.

"College is about opening doors to our nation's young people," he said. "Excessive student loan debt has the effect of closing those same doors by limiting the choices students can make."

Large debt from education loans has long been recognized as a common encumbrance for medical and law school graduates who eventually move into high-paying careers. The strain of debt, though, is greater on individuals who choose less lucrative professions -- teaching, social work, the ministry and public-interest law, where attorneys generally make far less than their fellow lawyers in corporate law.

Danielle West, a legal and policy research manager at NARAL Pro-Choice America in Washington, has about $60,000 in outstanding loans from undergraduate and graduate school. West said she took the non-profit job because she wanted to work on reproductive-rights issues.

"The fact that I am going to be paying money for so long bothers me," she said. "I was talking to my grandmother the other night, and she just doesn't understand that everyone I know has student loans. She doesn't understand how I can have so much debt so young in my life."

Study after study has shown that people with college degrees earn more than those who lack degrees. But the choice of attending college or going into less lucrative fields has an increasingly hefty price tag.

Chicagoan Lisa Southerland, who earns $48,000 as a state public defender, will have qualified for Medicare coverage when she stops paying $450 a month for federal and private loans. Southerland, 40, graduated from Loyola University's law school owing $76,000.

"I am on the 30-year plan," she said. "I think I'll pay until I'm 70 unless I win the lottery or ... marry a guy who works at a big law firm making the big bucks."

While she locked in a low-interest rate on her loans, she worries about future borrowers.

"People who don't have that many resources are going to have to pay that much more when they get out," she said. "Fewer and fewer people are going to be able to buy a home and have the kind of lives our parents had, even on less education."

Even as 23-year-old Casey Torgusson is paying off his undergraduate education, he plans to go further into debt when he starts graduate school this fall.

His debt of about $35,000 could more than triple with the $100,000 he expects to finance for a two-year master's degree program in international development. What's more, his new federal loans will come with the new, higher interest rates.

"It is just very tough," said Torgusson, a University of Notre Dame graduate whose annual salary at a Washington, D.C.-based non-profit is less than the one-year cost of graduate school.

"It was OK when I just had the undergrad [loans]. Going back on top of that, especially now that I'm on my own, is really kind of unnerving," Torgusson said.

Torgusson says he puts $225 a month toward paying off his student loan debt. Without that obligation, he said he could afford a car.

"College costs are becoming outrageous," he said. "Even if you took down the interest rates, the sheer amount is going to be a lot to pay back."

Well with college cost going up and the support going down. It's simple! We just stop educating our children. Didn't President Bush say that in order to stop the out sourcing of jobs we need to educate our children and those whose jobs are lost to over seas need to get re-educated.

Looks like we will start competing with all those countries with large unemployment rates. Then again Pan Handling is always an option.

I would think that with a $55K education someone motivated enough could get a job that pays more than $33K a year.

Hell, I don't have any college edjumakation, and I make more than that just being retired.

I got 60,000 + and the best job I can get is 24,000. Motovation has nothing to do with it. I would lick urinals clean if it paid enough. There are no jobs out there and the student loan people think you can pay your loan back at 800 a month when I only make 1,200. College has really paid off.......not!

My aunt just finished here PHD.... more than $50k in loans... and professors make around $30-$40k and she can't even find a job, she is a waitress right now lol...

I don't even know what I'm going to do to pay for this when I get out....

Join the Military!

Study after study has shown that people with college degrees earn more than those who lack degrees. But the choice of attending college or going into less lucrative fields has an increasingly hefty price tag.


Higher Education and all it's great "benefits"... always a sore point with me.

I know Bill Gates went to college for a bit, but did he actually earn a degree before starting Microsoft? I can't remember...

I know 19 year olds with no High School diplomas making over $150K a year working LEGALLY in the oil fields around my area.

So, saying that everyone with a college degree makes more than someone with no degree is horse... well, you get the expletive.

Even though I may not make more than a Fortune 500 CEO who has a college degree, I'm willing to bet I make more than most college graduates out there. I'd rather hire a High School dropout who shows me he/she knows his job than have to train a College graduate who may never get it...

College is overrated anyway. More than 70% of grads end up finding careers in something other than what they majored in.

The big question is... how long does somebody have to go to school before they understand that time is money? I bet they dont want to teach that. I see it as 4+ years and thousands gone (not even mentioning the money that could have been made), you will NEVER recoup that.

Also, I think all high schools should have a machine shop/wood shop/etc.

Join the Military!

Been there done that.

Join the Military!

wife allredy dose that and six more months of this I will be doing that

wife allredy dose that and six more months of this I will be doing that

I get FREE college, and a paycheck for the next four years.

Work full time, school full time.

Community college cost per semester, around 2,100 bucks.

My federal pell grant, 2,300 per semester.

I slacked off in high school, got a job, worked my balls of for a year to buy a car (My mark) and then went back to school full time, and have been getting checks from my school every semester, cant complain.

A 4 year school will put me in debt when I get out, hopefully my 3.5 GPA can get me a free ride for 2 years somewhere.

My tech. community college is only 25k for 2 years. when i went to private schoolin it was 34k for 2 years, i got 3.5k in debt with them right now.

if you went to a 55k school and only are making 33k/year i think you messed up somewhere along some lines....

ive got notta lick of college and make about 50k a year. feel sorry for you college dummies. should have picked a dying trade.heavy equipment mechanic. we are hard to find and we get paid well.

I'm a HS dropout. I got a warehouse job 9 years ago & now I run the place. I live comfortably & have no debt other than my $730 a month mortgage. My wife on the other hand graduated MTSU with a buisness degree & can't find a real job because her only experience is McDonalds. While she was a store manager & made 45K a year + bonuses, it seems to means nothing when you have Mcd's on your resume. She can't find anything other than food jobs. This leads me to beleive that a degree is utterly useless in comparison to experience. I am in school now getting an associates in logistics & supply chain management, but only because that's what I do. At the very least, that combined with my experience should provide me with employment opportunity for years to come should anything happen at my present job. I'm also paying cash for all of my classes as I can afford them. I think it's better to find a career before you pay for the education.

ive got notta lick of college and make about 50k a year. feel sorry for you college dummies. should have picked a dying trade.heavy equipment mechanic. we are hard to find and we get paid well.

I have been doing that because I couldn’t find an aircraft maintenance job, I only made 28k a year fixing forklifts. Jobs in this state are really hard to come by, even before this economic crap. I got into collage when aircraft mechanics were still making good cash, I got out and a couple idiots crashed some planes into a few buildings. Now I'm stuck paying for nothing and I dint mess anything up. Now I can fix anything from 747's to forklifts to Cars and boats, but I make 21k cleaning floors. So what do I do next?

ive got notta lick of college and make about 50k a year. feel sorry for you college dummies.

All due respect, how long did it take you to get to that salary?

I'll pull in almost $60k this year at the age of 23.

The problem with college debt is that kids go to school full time, live there, and spend four years of their life accumulating debt on zero or very little income. It doesn't take a genius to see that is a recipe for financial ruin. My solution was to work my way through college. Three jobs and a fuller course load than most of my unemployed classmates. Guess what? I graduated with a very managable amount of debt (will pay it off within two years) while they will be paying well into middle age.

[\soapbox]

Most college degrees are a complete waste of money.
And while the value of a degree goes down, the cost of it keeps rising.

A good apprenticeship or vocational training are worth much more than a liberal arts undergrad degree.

I get FREE college, and a paycheck for the next four years.

And you'll thow in undercoating at no extra charge...


Aren't you a recruiter?

Not until May 10, ssssshhhh! don't tell anyone.

Another victim of the Ivory Tower scam.

If the education recieved was worth the expense it wouldn't have to be shoved down the throats of american students from grade school on. Go to college, get a good job, be a success, what a load of bat guano.

Over half your class load has nothing to do with your major and the portion that does is often irrelevant and out of date. A degree now means little more than you can deal with administrative caprice.

Another victim of the Ivory Tower scam.

If the education recieved was worth the expense it wouldn't have to be shoved down the throats of american students from grade school on. Go to college, get a good job, be a success, what a load of bat guano.

Over half your class load has nothing to do with your major and the portion that does is often irrelevant and out of date. A degree now means little more than you can deal with administrative caprice.

Unless you need a degree in the sciences, then I aggressively encourage people to just get a vocational training. Learn a skill.

Another victim of the Ivory Tower scam.



Would you rather your doctor skip college and just go right into working on patients?

Or how about your lawyer skip college and just kind guess his or her way through the labrynthe of BS that is the American Justice System?

Perhaps the engineer who designed your buildings should have skipped college. Alll those pesky codes and physics classes really don't have much impact on structural integrity anyways.

Some careers require college. Unfortunately, many do not, and that is where many people fall into trouble. I am, however, happy to say that as of my five year high school reunion I can see a direct correlation between those of us who went to college and those who did not. Namely, those of us with paper are employed. Those without, are not. Regardless of how it is cut, we made out better.

For once I actually agree with Lincolnx2, join the military.
1. Job security out the ying yang
2. Pay isnt bad, enough to live comfortably
3. Free college
4. Since of pride you cant find anywhere else, for the few and the proud that is. :)

I went to WVU for 3 years before I joined, ran out of money and needed some help. Thought to myself "be a Marine, they help with college". 11 years later here I am. No need for a degree now. Sure I could finish and become an officer, but thats not for me. I'm an enlisted man, its in my blood.

Not until May 10, ssssshhhh! don't tell anyone.

BAN HIM !!! j/k :D

For once I actually agree with Lincolnx2, join the military.
1. Job security out the ying yang
2. Pay isnt bad, enough to live comfortably
3. Free college
4. Since of pride you cant find anywhere else, for the few and the proud that is. :)

I went to WVU for 3 years before I joined, ran out of money and needed some help. Thought to myself "be a Marine, they help with college". 11 years later here I am. No need for a degree now. Sure I could finish and become an officer, but thats not for me. I'm an enlisted man, its in my blood.

Its not a bad way to go.
My son is 16.
I won't have the money to send him for a four year ride, he knows this.
He is talking Air Force.
It was all his idea, I will support him in whatever he decides.

I'm caught up in this "education" thing... UGH!!!

All I will say... it's frustrating...

Its not a bad way to go.
My son is 16.
I won't have the money to send him for a four year ride, he knows this.
He is talking Air Force.
It was all his idea, I will support him in whatever he decides.

The Airforce has a six month wait! Might want to Navy or Army, tell him to do Communication or any job that requires him to get a Top Secret Clearance, it will pay off if he decides to get out.

I almost went in the Air Force... spent 2 years in CAP and then changed my mind...

For once I actually agree with Lincolnx2, join the military.
1. Job security out the ying yang
2. Pay isnt bad, enough to live comfortably
3. Free college
4. Since of pride you cant find anywhere else, for the few and the proud that is. :)

I went to WVU for 3 years before I joined, ran out of money and needed some help. Thought to myself "be a Marine, they help with college". 11 years later here I am. No need for a degree now. Sure I could finish and become an officer, but thats not for me. I'm an enlisted man, its in my blood.

Same here been in for 7, retire at 38 years old, cant beat it. The military gave me the confidence that I have today.

I almost went in the Air Force... spent 2 years in CAP and then changed my mind...


They are cutting back big time now

The Airforce has a six month wait! Might want to Navy or Army, tell him to do Communication or any job that requires him to get a Top Secret Clearance, it will pay off if he decides to get out.

Well hes 16 so he has a couple years funny thing Communication area is what he was talking about.
He is a real smart kid.
I don't know were he got it from.
Not my ex thats for sure ;)

HAHAHAHA... dumb bitch!

Well hes 16 so he has a couple years funny thing Communication area is what he was talking about.
He is a real smart kid.
I don't know were he got it from.
Not my ex thats for sure ;)


Actually he can do Basic Training when he complete's 11th grade, it will give him pay as a E1 maybe an E3 for nine weeks, and complete his job training after he graduates highschool, if he still wants to join, shoot me a PM, I cant put him in but I can get him as much as possible, and tell you if the recruiter is full of crap.

Would you rather your doctor skip college and just go right into working on patients?

Or how about your lawyer skip college and just kind guess his or her way through the labrynthe of BS that is the American Justice System?

Perhaps the engineer who designed your buildings should have skipped college. Alll those pesky codes and physics classes really don't have much impact on structural integrity anyways.

Some careers require college. Unfortunately, many do not, and that is where many people fall into trouble. I am, however, happy to say that as of my five year high school reunion I can see a direct correlation between those of us who went to college and those who did not. Namely, those of us with paper are employed. Those without, are not. Regardless of how it is cut, we made out better.

Doctors and lawers learn their trades in Med School and Law School, often after wasting years and thousands of dollars in college. Most careers that require college are not served well by the time people persuing them wasted on required liberal arts courses.

Those of us who went to college would have done better any way as we tend to study and have an interest in learning that many don't share. If your intelligent going to school doesn't make you smarter, it just helps make you less ignorant. I've known many successful, itelligent people who have not even finished high school. Degrees are an elitist tool useful for scocial stratification.

So if he does basic between 11 and 12 grade, whats he do during his senior year? Thats crazy. I have never heard of that. Doesnt happen in the Corps. Once you sign the papers and ship out, thats it. done deal. You get leave after boot camp and then go to combat training and then to your MOS school.

So if he does basic between 11 and 12 grade, whats he do during his senior year? Thats crazy. I have never heard of that. Doesnt happen in the Corps. Once you sign the papers and ship out, thats it. done deal. You get leave after boot camp and then go to combat training and then to your MOS school.

I have heard about this being down.

I just feel like I won't be able to earn what I want to without a degree...

At 32 I am just getting to the last of my student loan dept. Had about 65k when I graduated in 2000 at 24 years old from a 5 year co-op program. The liberal arts bull was useless, even alot of the courses directly related to my major were useless. I got my experience from the Coop jobs inbetween semesters and the 2 other jobs I had. Went to school in the city, had a place in my hometown with the girlfriend, had my car (tbird) and all the toys - bought my first VIII my last year at school. The school was major $$$$ - Northeastern University.
With my coop experience I got a job making $29k with a potential of 4 bonuses. Wound up about $44K After bonuses. Pay steadily increased over the years and the benefits are unreal. Basically what I got out of college was exposure to lots of different subjects, work experience through the coop program and some good research skills. Definately not worth the money I continue to pay but I am sure I wouldn't be where I am going with the potential I have if I had not gone. Nothing is perfect, school isn't for everyone. It worked for me.
Some people just get lucky in life. Find a good real job at the right time and place and make a killing. Not me! It's better to go to school now then later when your job is obsolete.

It can be done but it sux!!!!!!!!

So if he does basic between 11 and 12 grade, whats he do during his senior year? Thats crazy. I have never heard of that. Doesnt happen in the Corps. Once you sign the papers and ship out, thats it. done deal. You get leave after boot camp and then go to combat training and then to your MOS school.

after he completes 11th grade he goes to basic training (boot camp) this puts a few dollars in his pocket for his senior year, after his senior year, he goes to AIT or job training, then to his first duty station. this was started because most teenegers can't get past being away from home for more than 6 months initially, it also allows us time to get clearances and things straight.

I just feel like I won't be able to earn what I want to without a degree...

How much do you want to earn?

I just feel like I won't be able to earn what I want to without a degree...

And how did you plan on earning it?

There is no doubt having a degree will give you more options, even later in life in situations you may not expect to come up.

My brother-in-law has worked for Chevron for almost 25 years and just failed to get a position he wanted because he didn't have a degree. They didn't even care what the degree was in! Now the guy who got the position keeps calling him to find out what he's supposed to do! Corporate America, screw the guy who can do the job, get someone who makes HR happy.

With so many people looking for work a degree has become just another screening device. The last job I tested for had 1300 applicants for 5 positions. You can imagine how they were looking for ways to thin the herd.

It can cut both ways though. I've been shut out of several entry level jobs because I was "over qualified". Don't want to hire someone who is ready for the next step.......

I think that what ever gives you the most options is usually the best choice for todays fast changing workplace. Who knows what you'll be doing five years from now?

[QUOTE=Titan;513947]
With so many people looking for work a degree has become just another screening device. The last job I tested for had 1300 applicants for 5 positions. You can imagine how they were looking for ways to thin the herd.
QUOTE]

That's fundamentally the issue. The exception of the science & engineering fields, graduates almost never use anything they learned in college; rather, it is a qualifier and simply a piece of paper that opens doors.

The last company I worked for wouldn't even talk to somebody without a BS or higher. Regardless of experience, and more importantly regardless of what that degree was actually in (my degrees were not even remotely close to the job I held). Even the secretaries had business degrees (one had an MBA).
That company is now posting small gains over 2008 numbers while every single one of their competitors are posting double digit losses.

It brings to mind a show I saw years ago where they were going around New York city talking to doormen and waiters. What a well educated group they were, BA, BS, and the odd Masters degree were common. It showed me once again how success in the classroom didn't mean success in the real world.

Actually he can do Basic Training when he complete's 11th grade, it will give him pay as a E1 maybe an E3 for nine weeks, and complete his job training after he graduates highschool, if he still wants to join, shoot me a PM, I cant put him in but I can get him as much as possible, and tell you if the recruiter is full of crap.

He is still on the fence, hes in 10th now so he would need one more year.

If he starts to get serious I will PM you.
Thanks :)

1 year of schooling behind me, 9,000 in student loans. I originally was majoring in Accounting with plans of heading to law school... NOT going to happen. Law school is insanly expensive (Upwards to 50k-100k a year). Yes, being a lawyer in the long run pays off with a very large salary, but problem is that currently the law field is flooded with "wanna-be lawyers" who have degrees and 100's of thousands of dollars of debt and working for a fast food chain. Typically you must carry a GPA that is higher then 97% of the national average to get a ride to law school, then you must carry a GPA higher then 97% of all law school grades to get an instant job as a paralegal (making 35-50k annually until becoming partner which could take nearly 10 years)

So I have decided on the medical field. Im taking this next school year off and joining the National Guard (joining as a 68P (Radiologist)). Hopefully I can use the experience I earn in the field (AIT) and my military background to cut the line of other qualified applicants, and still be able to get the military to cover the costs of my masters:)

I get FREE college, and a paycheck for the next four years.


I don't think it was free http://web.camaross.com/forums/images/smilies/usa.gif

I don't think it was free http://web.camaross.com/forums/images/smilies/usa.gif

Actually it is paid for by "tax payers" you get $4500 a year for college, you dont have to worry about anything except books, we also have a program that allows you to attend classes everyday for about 6 months, that means you still get paid as a soldier, but instead of coming to work, you go to college. We also have a program that will pay for a spouse or child to attend college*

Who wants to Join TODAY!!!!! LOL

Honestly, if I was 45lbs lighter I would go down and do MEPS right now!

Give me 3 months (seriously I'm joining a gym tomorrow), my goal is to go active in the air force. My MOS would be an aircraft mechanic since I already have a civilian federal license. The wife is already a reservist along with half her family. So I'm already used to the military life, some what.

I'm just sick of the idea of how much I wasted on collage and now look what I’m doing, If this temp job doesn’t pan out I'm F'n out of here.

I can’t even get a car loan because my “debt to income ratio” is to high, Thanks collage, really worked well for me!

I have been trying for years in all different fields to apply my certificate i.e. forklift mechanic, elevators, etc. I even worked for an airline for six months before F’n Delta bought Northwest out.

I’m not saying collage is a waist, it was a blast and I learned a lot. I know in the future it will help me out in landing a job once they see where I went and what I got. All I’m saying is not worth the money. Have some one else pay for it other wise the debt will screw a lot of things up.

Ok I’m done for now, it’s a touchy subject for me.

I just feel like I won't be able to earn what I want to without a degree...

even with one you wont.

Eric,

I'm going to get smashed for saying this, but you might want to get out of the Midwest. There's not much industry out there that isn't manufacturing related (and they are doing oh so well right now), and the impending disaster when the automakers go into Chapter 11 will hit out there the hardest.

Here in the Northeast, I am a reasonable distance from NYC, Boston, Philadelphia, Washington DC, Baltimore, & Pittsburgh - I can be in any of those cities inside six hours; most under three. Plenty of decent paying work for educated folks out here. Or if that's not your cup of tea, there's lots of America left to explore. I just think you're in a difficult area for finding work, which is unfortunate because it leaves you in that tough position.

I know I could go down south, or hit up the east coast and get a ok job out there. But I like it here (other then the rust) because my family and friends are here and that makes it hard to leave.

The wife and I just bought a house in Oct so we aren’t going any where fast with that. But for right now I will wait till my wife comes home from the desert and hopefully by then Plan "A","B", or "C" will be working by then. I'm just getting impatient trying to figure where my life should be going, been trying to figure that out for a decade now.

Understood.

Best of luck to you, sir!