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Wednesday, May 25, 2011

The College Scam: Debt AND No Job

I grew up being told by those around me that all that life had to offer was more readily available to those who took the time to earn a college degree. High school counselors were quick to point out that over a person's lifespan, more money would be earned if I had a college degree as opposed to only possessing a high school diploma. Heavily touted were the Ivy League or elite colleges such as Yale, Duke and Harvard among others.

I started college a year after high school. I was 19 years old and on my own. Housing wasn't too hard to find and I quickly settled in to a quiet, sleepy little college town of about 15,000 people. About 5,000 of that population was the college.

It didn't take long to figure out that the lack of jobs in town was due to the large population of students in the area. I still managed to land a few odd jobs at a corner store and the university cafeteria and library. The problem with these minimum wage jobs was they barely covered living expenses, let alone college tuition.

I met with a financial advisor from the regional university in the town of my new residency. It was there that my life changed forever. It changed forever and I didn't even know it. At least, not until more than a decade later. That was the year I learned about student loans and began to acquire debt.

Up until this time, the only debt I had was $1500 for the 1983 Camaro I was driving. Grandma had co-signed with me a few years earlier and my payments had always been made on time (no way was I going to let Grandma down.) I was almost debt free and didn't really know what freedom I (almost) had at my fingertips.

I was "awarded" several student loans from different entities within weeks of my financial advisor helping me to fill them out correctly. The paperwork was daunting but with the aid of a professional, it only took about twenty minutes. The best part, or so I thought, was that the "awards" not only covered my university tuition AND my books and fees but it also allowed me a little extra for living expenses. SWEET!

I had very little credit history but to my knowledge the student loan companies didn't even ask about previous credit or credit scores. Just have the school fill out their portion of the document, sign on the dotted line and wait for the money to come.

And the money came. And it came. Semester after semester, I continued to pass my classes and proceed to the next year. Freshman and Sophomore year were a blur of lectures and tests. It was during my junior year that I moved from Oklahoma to Arizona, thus switching to the lavish Arizona State University. Ah, the palm trees and sunny weather. I hardly noticed the increase in tuition expense with so much going on around the ultra-large campus (remember, I came from a small town.)

ASU quickly got me in the fast track to financial aid. Their process was so streamlined, I could do most of it by dialing an automated telephone line. Aid continued to ebb and flow. I rented a condo here and shared a four bedroom house there. Towards the end of my college "career" I met my wife, in a class at ASU. Needless to say, my education was reduced to summer classes only during the last few semesters as we begining to have children.

When it was all said and done, I beamed with pride as I held my Bachelor of Science degree. I had accomplished what everyone told me I should do. My mother and father had Bachelor's degrees and now, so did I.

Now what?

For the sake of time, I'll just tell you that they jobs I held after receiving my degree, for the most part, had NOTHING to do with my degree. I managed a smoothie bar in a health club. I sold Toyotas at a car dealership. It seemed as though my job income was slowly falling below the needs required to support a growing family. We were starting to run late on bills.

That's when the student loan companies began to call inquiring about my repayment options. Oh, did I mention I racked up $80,000 in student loans? Yep. $80,000 for my Bachelors degree. There was no way I could afford to pay that back at this time. Luckily for me, or so I thought, I was introduced to a process known as deferment.

Deferment means the student loan company will let you "skip" your monthly payments for usually six months to a year. You don't have to pay a dime but the interest continues to accrue. "Sure, I'll defer. I should have a better job in a year. After all, I have a Bachelors degree."

I am now indebted for the rest of my life. Indebted to an entity which has been taken over by the federal government. If I don't make my payments, it will eventually be garnished from my wages. Laws were passed to make it impossible to file bankruptcy on federal student loans. I believe it is the only thing that can not be washed away by a bankruptcy.

Am I making more money now? Yes, because I went back to school again...twice. This time I learned two trade skills: Radiograhy and Sonography. It is because of these trade skills that I can now "afford" to have a family. The kicker: Sonography only cost me $6000 for the whole two year program.

I'll never understand how a government can impoverish its young people by offering them loans with no credit worthiness necessary to get approved. Enslaving us to be doomed to pay back loans for decades to come with no REAL guarantee that we'll even get a job.

Mac Slavo's recent title says it all: "Nowhere to Go: 85% of College Graduates Will Return Home Jobless

It is one giant College Conspiracy and EVERY student from junior high and up should watch the documentary detailing how we've been scammed about colleges all along.



Now, I'm NOT saying don't get educated. I'm saying don't take out student loans to do it.

Luckily, for now, student loans die with the borrower. It won't be passed down to my children when I depart this earth. That's a good thing...because I just may still have a balance when I die.

6 comments:

Kris said...

It's sad, isn't it? I have $50k in student loans and work a job making less than that annually. I have a professional job now, but I'm not sure I couldn't have made what I make now if I had just kept bartending like I did in college--no degree required.

I used to attend a church that had its own college. They did not allow the students to borrow money to attend. I don't know the ins and outs of how they made that happen, but it was part of their goal that the students would not graduate with loans hanging over their heads. I wish secular schools had that goal.

When I first began attending community college in 1988, it cost $25 per semester hour. Now it costs hundreds per semester hour, and they tack on all kinds of fees. And they price gouge you on the cost of textbooks. Unreal.

My husband has an ex-stepdaughter who he's still very close to. She's about to start her senior high school year and is beginning her college search. We are leaning hard on her to do it without borrowing money. My husband is retired Air National Guard and has exacted a promise from her to at least look into the National Guard program and the GI Bill. I'm thinking of showing her my student loan statement. I hope she's smarter than I was with money at that age.

Another angle: I have a co-worker with two daughters, one who is in college now and one who graduates high school this year and intends to go to college. He and his wife are paying for their college, because they don't want their girls to have student loan debt. So he works one full time and one part time job. His wife works full time. He's thinking about remortgaging his house. They need a new car but can't afford it right now. He had a heart attack a few weeks ago--stress related, I wonder?

Sorry for the long comment--I get passionate about this!

The Orange Jeep Dad said...

@Kris Your passion is well founded. Those of us strapped with student loans are profoundly affected.

My wife and I encourage higher education to our daughters but we will strongly caution against taking on debt to attain it. We purposely exposed each child (when old enough) to sports, musical instruments and good study habits with the end goal being an "in" to a possible scholarship. I have no experience with the military but would not discourage that route either. I have a good friend who had her entire medical school paid for while serving in the Army. She now makes a six figure income and has no student loans.

I certainly won't pretend that college taught me nothing. I firmly believe the more you understand the world around you, the easier it is to adapt and coexist. But there is just as much to be said for the School of Hard Knocks or learning through an apprenticeship. Academia has just become WAY to commercialized and expensive.

Thanks for your comment!

Eustolia Nitta said...

One-on-one conversations with a financial adviser can help you a lot in fixing your financial status. It's good that it worked for you. This post will be great advice to all students taking out loans. I know they can benefit them in the same way that you benefited from it. I hope you can share more financial tips, especially to those students.

SunsetPayday.com

Jaden Allred said...

It's better to get your degree without a loan, but we can't blame the students who depend on these loans to finance their studies. Still, it's advised that students must carefully study the terms of their loans and avoid loan sharks. The best thing that they can do is to consult financial advisers.

Jaden@TorontoBankruptcyAdvice.com

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