Is 4 Years of College Worth A Lifetime of Debt?

By: Shanice Miller, founder of DebtFreeCollegeGrad.com

Recently, there have been a lot of articles surfacing about skyrocketing college costs and the effects that student loan debt has on graduates. Usually, the student loan debt that graduates end up with is so abundant that it puts a serious burden on them. The burden is so great that it poses the question, "Is 4 Years of College Worth A Lifetime of Debt?"

Yahoo! Finance spotlighted "7 College Graduates Whose Lives Were Wrecked by Student Loan Debt." These 7 people's stories and experiences can help you be the judge--- Is 4 years of college worth a lifetime of debt?

"Stephanie Snyder, 44, graduated in 2005 with a B.A. in Public Administration. She worked three jobs at one time to pay down her $38,000 student loan balance."

"Carla Ruiz, 53, earned her MBA in 2006. Today, she's $120,000 in debt and lives in an attic apartment."

"Kyle Laffin, 25, asked his dad to co-sign a $100,000+ private student loan for a B.A. in accounting. Now, he has $1,200 monthly payments. His dad is working two jobs and dipping into his retirement savings to help him pay it down." 
  
"Since earning his MBA in 2004, Michael Pope, 38, has been bankrupt, homeless, and unable to find a job that pays well enough to tackle his $140,000 loan debt."

I've only summarized 4 of the 7 people in the Yahoo! finance article whose lives were wrecked by student loans. (To read the full article, go to: finance.yahoo.com/news/7-college-graduates-whose-lives-were-wrecked-by-student-loan-debt-151703790.html?page=all)

So back to the question, "Is 4 years of college worth a lifetime of debt?" After reading these stories, I think not. College is supposed to help you obtain a better life, but being submerged in debt will not help you accomplish that goal.

Would you trade a lifetime in debt for a college degree? Leave your comment below.

Student Loan Forgiveness Programs: Do You Qualify?

With all of the concern and discussions on the debt crisis, can you believe that there are actually student loan forgiveness programs?

According to a recent study, over 33 million workers can qualify for student loan forgiveness.

If you work in a school, hospital, city hall, or join the military, you can be eligible for the student loan forgiveness program. Teachers, firefighters, police officers, soldiers, and even health care workers can qualify for these student loan forgiveness programs. Clerks at state department of motor vehicle offices, secretaries at city halls, and accountants that work at non-profit art groups can also qualify.

One of my friends that graduated with student loan debt signed up to become a teacher through a student loan forgiveness program. She had to work in an under-served area, committed to working there for a set amount of time, and took a pay cut, but to her it was worth it. At the end of her contract, she will be free of student loan debt.

Would you make that trade off--- taking a pay cut and working in an under-served area for a specified amount of time to rid yourself of your student loan debt? Leave a comment below with a "yes" or "no" and why you would or wouldn't.

By: Shanice Miller, founder of DebtFreeCollegeGrad.com

Parent Plus Loan, Who Is To Blame?

In the last two posts titled, "Parents, Are You To Blame," we discussed the rapidly increasing amount of student loan debt through Stafford loans and the Parent plus loan.

There we posed the question: who is actually to blame for all of this student loan debt that has been accumulating over the years through the parent plus loan.

If you didn't get to read the first part of the article, you can view it here.

If you missed the second part of the article, view it here.

In this last part of the three part series, we will come to the conclusion on who is to blame for the student loan debt crisis through Stafford loans, private loans, and the parent plus loan.

 

One last thing that I noticed when I was in college was that the students who were responsible for paying for their own college education took college more seriously than the students whose parents took the responsibility. I remember being in my Pre-Calculus class with another student. He was a junior at the time (and I was just a freshman). I asked him what he was majoring in. He said he didn't know. He was just going to college because his parents told him to and they were paying for it. If you are a junior in college and you still don't know your major, you are most likely not graduating in 4 years. You are going to need an extra year or two years (maybe more) before you are able to graduate unless you just major in general studies. Parents, understand that an extra year or two in college means extra money that it will cost before graduation. For some, this will equate to more student loans, including the parent plus loan, that will have to be taken out.

So who is actually to blame for the student loan debt crisis through parent plus loans?

Sure, we can blame the government and colleges. They shouldn't have allowed it to get this out of control. But ultimately, students and parents are to blame for the student loan debt crisis through stafford, private, and parent plus loans. At the end of the day, it is your debt that you signed up for. Each person has to take responsibility for their own actions.

One last note: Parents and students, if you don't know something or don't understand something completely, you should seek help from a professional.

By: Shanice Miller, Founder of DebtFreeCollegeGrad.com

Parents, Are You To BLAME For Student Loan Debt???

Student loan debt is getting out of control!

According to the Wall Street Journal, "Americans are borrowing more to pay for college." By the beginning of 2012, Americans owed $904 BILLION in student loan debt which is an 8% increase from just last year. So who is to blame for all of this student loan debt?

Are colleges to blame for this excessive student loan debt?

With rising tuition and fees which cause the students to borrow more just so they can stay in college and get a degree to hopefully get a "good" job when they graduate, it is a possibility.

Or is it the government's fault for all of this student loan debt?

The government should be increasing the amount of grants given to students to help balance out and help the students keep up with the increasing college costs, right?

Actually, the PARENTS are to blame for student loan debt!

When I was in college, I encountered too many students who chose the college they attended just because their friends were going there or the campus looked nice or "it was far away from home." The truth of the matter is soon-to-be college students don't really take into consideration the cost of the college. At that age, they are just so excited to go and are only thinking with their emotions. The mounting student loan debt that they sign up for each year isn't quite real yet. It just seems like another form that they have to fill out in order to take college classes. It doesn't get "real" until Sallie Mae sends them a paper in the mail stating that their first student loan payment will be due 6 months after graduation and by that time it is too late. They have acquired $30,000 or $60,000 or even $120,000 in student loan debt (not including interest) and don't know where they are going to get the money to pay it back with the entry-level positions that they have accepted.

Parents, you HAVE to be the ones to think logically in this situation. Sit down with your soon-to-be-college student and have them understand the cost of attending the college they want to go to. Compare it to the costs of some of the other colleges that they were accepted into as well. Have your child understand that the cost of attending the college is for each year, not the entire 4 years. So if you have to take out student loans in the amount of $15,000 this year, you need to multiply that by 4 (at the very least) so their total student loan debt will be $60,000 that they will have to pay back, not just $15,000. Even tell them how much the monthly payments will be that they will have to pay back so they understand and are aware. Parents, you MUST get your child to think about the future, not just the present. Right now, they are just signing a paper. But in the future, that signature is going to cost them more than they ever imagined.

By: Shanice Miller, Founder of DebtFreeCollegeGrad.com

Parents COURT ORDERED to Pay Back Child's Student Loan Debt!

I ran across this article about parents being court ordered to pay back their child's student loan debt from the Wall Street Journal not too long ago and was shocked and amazed by what it said.

The article states, Lenders who extended $132,000 in student loan debt to Kristina Pietras before she dropped out of the University of Toledo knew she couldn’t afford to pay back the student loan debt.

But they convinced a bankruptcy judge that her parents could pay back the student loan debt.

Yes, her parents were COURT ORDERED to pay back the daughter's $132,000 student loan debt. The parents even tried to file bankruptcy, but even filing for bankruptcy didn't make the student loan debt go away.

Wow! Parents, BEWARE! You could, in fact, be held responsible for your child's student loan debt if you co-sign on a loan.

The articles continues on to discuss other cases where parents, and even grandparents, were court ordered to pay back the student's student loan debt when the student defaulted on the loan.
Could you imagine having to pay back another person's student loan debt? You didn't even get to reap the rewards of the student loan debt, but you are still responsible for it.
So the moral of this story is parents, only sign your name as a co-signer for the student loan debt if you are prepared to pay them back yourself. You don't have to get student loan debt to pay for college. There are other options.

If you would like to hear about other options that are available to fund your child's college, email me at: info@debtfreecollegegrad.com

To view the article, go to: http://blogs.wsj.com/bankruptcy/2012/10/29/soured-student-loans-bankrupt-parents-grandparents/

Leave a comment letting me know how you would feel and what you would do if you were court ordered to pay back your child's student loan debt.

By: Shanice Miller, Founder of DebtFreeCollegeGrad.com

High Income Parents CAN Qualify for Need-Based Financial Aid

One of the biggest MYTHS is that students that have parents with high incomes (high incomes referring to parents making $80,000 or $100,000 or more!) cannot receive financial aid.

There are parents all over that do NOT fill out the FAFSA (Free Application for Federal Student Aid) because either 1) they think they won't qualify for financial aid because they make too much (or have a lot of assets) or 2) they filled out financial aid forms before and only qualified for loans. When high income earners don't know the "loop holes" that you can use when filling out your financial aid forms, they will only qualify for loans. Can you see why so many people that earn a lot of money think that it would be a waste of time to fill out financial aid forms? I sure can! It's all because they don't know the rules to the "FAFSA" game.

So GREAT news for Parents that are 6 figure earners: You CAN qualify for need-based financial aid. One of the ways that you can qualify for financial aid is by choosing a college that uses the Section 568 formula. With the Section 568 formula, you can take all of the money sitting in your bank account and pay down or pay off your mortgage. Doing this will help qualify you for need-based financial aid. Whereas, if you would have kept the money just sitting in your bank account, you most likely will have received $0 in need-based financial aid.

One thing to remember, the financial aid forms are always based on the previous year (just like your taxes) so you have to really think about the right time to do these things. For example, if you take all of the money out of your bank account in the beginning of the year, say January 2013, it will not be taken into consideration for your child's financial aid award letter for the 2013-2014 school year because the 2013-2014 financial aid award letter is based on your income and assets from 2012.

To find out more ways how you or your child can graduate college debt free and get financial aid, visit: www.debtfreecollegegrad.com

By: Shanice Miller, founder of DebtFreeCollegeGrad.com

3 Exclusive Tricks to Graduating Debt Free

Everyone dreams of college, but no one thinks about how you will graduate debt free?

Graduating debt free is a BIG problem because high school students don't think about the costs associated with going to college. Although children and students don't take the cost of attending college into consideration and don't think about graduating debt free when they are first starting college, the parents NEED to. Students are graduating college with enormous amounts of debt. This debt is putting a hardship on children after they graduate, making moving out and purchasing their own homes or cars more and more difficult. These things wouldn't be difficult to obtain if the students would have graduated debt free. So I am going to share with you 3 of my exclusive tricks that I used that helped me graduate college 100% DEBT FREE!

Exclusive Trick to Graduating Debt Free #1: Scholarships

I cannot STRESS this trick enough. Scholarships were the difference between me owing money to the college each semester and me graduating debt free and getting money back from the college. Scholarships essentially helped me graduate debt free. Most people think scholarships are only for people with good grades. That is a BIG MYTH. Merit scholarships, or scholarships for people with good grades, is only ONE type of scholarship that is available for students to apply to to help them graduate debt free. There are a lot of merit scholarships that you can apply for and win, especially for students at the top of their class. However, you may not get the most merit scholarships from the top schools. Some schools may give you more merit aid than others based on how you rank and if they see you as a "desirable student." Colleges will compete to get the best students and they do this by giving the most merit aid (aka giving the student a full-ride scholarship so the student will graduate debt free). There are other types of scholarships besides merit that you can get. Usually these scholarships are based on community service performed, extracurricular activities that you are involved in, intended college major/ career, or any other hobby or interest that your child has. Scholarships played a big part in helping me graduate debt free.

For tips on winning and receiving scholarships for college so that you can graduate debt free visit: http://www.debtfreecollegegrad.com

Exclusive Trick to Graduating Debt Free #2: Community College

Community colleges can really help you graduate debt free. Community colleges usually get a stigma of being the place that students don't really want to go or think about when they are picking a college to attend. People think community colleges are for students who don't have good enough grades to get accepted into a 4 year university. They call it the "dumb school" or the "13th grade." That can be further from the truth. If you think you are going to get an easy "A," you're wrong. I went to a 4 year university my first semester, then decided to switch my major. When I spoke to my adviser about my new major, she couldn't offer me any advice besides "students that pick that major usually switch to a different college." So that's what I did, I switched. I applied to another university, but they were taking too long to get back to me. The beginning of the new semester was nearing and classes were filling up quickly. I didn't want to waste a semester not doing anything so I signed up at the community college. To my surprise, a lot of my professors at the community college were either doctors or the same professors that taught at the 4 year university that I wanted to attend. They definitely graded me the same that they would grade the other students in their courses at the 4 year schools.
Now that those stigmas and myths are out of the way, my exclusive trick to graduating debt free #2 is to go to a community college. Community colleges are very inexpensive to attend in comparison to in-state or out of state colleges and universities. If you start off at a community college first, you will save a lot of money on room and board (by commuting to school and staying at home with your parents) and on tuition costs (since tuition at community colleges are about half the price of in-state colleges). Saving this money can help you graduate debt free. After you spend your first 2 years there, getting the basic courses out of the way, you can transfer to your desired 4 year college.

Exclusive Trick to Graduating Debt Free #3: In-state Colleges

Attending a college that is in the same state as your residence is usually cheaper than attending a college that isn't in the same state as your residence. Saving money here can also help you graduate debt free. If you are planning to move to a different state when your child is in high school (maybe you are moving because there are better state schools in another state) you should check out the college's rules for being considered a resident of the state. Some colleges will ask if you have been a resident of the state for the past 12 months in order for you to qualify for in-state tuition.
I used these 3 tricks (along with a few others) to graduate college debt free. Let me know (in the comment box) some things that you would do to cut college costs so that you (or your child) can graduate debt free.

By: Shanice Miller, founder of debtfreecollegegrad.com

Graduates with Student Loans Ineligible To Purchase a Home?

Did you know student loans can make you ineligible to purchase a home?

"College graduates typically earn more than non-college graduates during the course of their lifetimes, yet the average 30-year-old who left school with a bachelor's degree in 2004 is most likely ineligible today for a home mortgage due to a high debt-to-income ratio." (Meaning it's because of their student loans) (Excerpt taken from the Post Gazette Article titled "Student Debt Pushes Homes Out of Reach)

Reading this first paragraph really made me understand the reality of student loans and the toll that it takes on the student. I had never stopped to think about how difficult it would be to qualify for a mortgage, or even pay all of your bills each month once you graduate from college with student loans because I was not a part of "that world." Right after I graduated college, I immediately started looking for a house to purchase. I got my pre-qualification letter and was able to purchase my home without any issues just 2 months after I graduated probably because I didn't have student loans. The process was too easy for me. I had graduated debt free (without any student loans) and received refund checks back each semester due to being strategic about the college that I chose AND winning scholarships. I saved a lot of the money from my refund checks to use for the down payment and closing costs for my home. 

At 22 years old, I wanted that house with all of my heart. It was my own home. Something that I accomplished and achieved. It symbolized freedom and happiness. Everyday I walked into the house smiling. Years later, I am still smiling and paying the mortgage happily. Nothing feels better to me than coming home to my own peace and quiet without student loans. With all of the joy and pride that the house gives me, I couldn't imagine being 30 years old--- the age when most people are getting married and purchasing their first homes--- with excitement brewing in my stomach while going to the bank and applying for my first home mortgage loan to only hear the words "REJECTED" because of student loans--- something that I signed up for when I was only 18 years old and not fully understanding what was happening.

The article continues on to state, "Today's college graduates are worse off financially than previous generations" due to student loans.

To read the full article: http://www.post-gazette.com/stories/business/news/student-debt-pushes-homes-out-of-reach-649831/

By: Shanice Miller, founder of DebtFreeCollegeGrad.com

Student Lives in Van to Avoid Student Loans!

We should all avoid student loans by living in a van! According to Yahoo Finance, a graduate student lived out of a van so that he wouldn't get student loans.

Ken Ilgunas acquired $32,000 of student loans when he finished his undergraduate studies. He immediately felt the stress of the student loans and wanted to get rid of them, but he had a big problem--- he wasn't able to find a job in his field. So he took a low-waged position, earning just $8/ hour even though he had a college degree, and lived very frugally to aggressively pay down his student loans. After two and a half years of this, he paid a total of $35,000 (some interest had accrued on the student loans) and was free of his student loans, but he wanted wanted to continue his education. Ken figured that living out of his van while almost starving himself and freezing to death during cold winter nights would be the sacrifice that he was willing to take to avoid getting student loans again.

Now this is a really extreme way to avoid student loans, but I can understand the logic behind him doing this.

Attending college is much more affordable when you just have to pay for tuition. Adding in the cost of room and board to your college fees can just about double your cost of attending that particular college. For example, if you go to a college in your state of residence, tuition may be $4000- $5000 per semester (depending on which college you attend the cost can be higher or lower). The room and board (on campus housing and meal plan) will add an additional $5000 or so to your cost of attendance each semester. So instead of college costing $5,000 a semester, it now costs $10,000 each semester with the housing and the meal plan. Over 4 years, with just tuition costs you might have had to get only $20,000 in student loans but now that you had to pay for housing and meals, you had to take out $40,000 in student loans.
Luckily, I didn't have to make this extreme sacrifice to avoid student loans and you don't either. I applied for and won enough scholarships to cover all of my school costs AND even got money back from the college. You too can do the same thing.
To read the complete article, go to: http://finance.yahoo.com/news/duke-grad-student-secretly-lived-in-a-van-to-escape-loan-debt-194021112.html?page=1

By: Shanice Miller, founder of DebtFreeCollegeGrad.com

Are You Going to Have College Debt When You Graduate?

I was well on my way to being over $100,000 in college debt when I graduated college...

By all means, being in college debt isn't what I wanted or anyone else that I know would EVER want. But when you aren't aware, you just don't think about things like college debt.

At 17 years old, everyone keeps asking you two main questions:
-What college are you thinking of going to?
-What do you want to be when you grow up?
And I was tired of saying "I don't know" and not having an answer so I just picked something. Anything sounded better than "I don't know." At the time I was taking a graphic design class in high school that I enjoyed. I'm a creative, artsy person who loved to work with computers so I picked that field. Looking back on things, schools really don't teach you about many career options. They make it seem like your options are being a doctor, lawyer, accountant, teacher, fire fighter, police officer, etc. (All of those options can lead to college debt.) Little did I know, the main careers, weren't the only careers. So, at 17, I chose to be a graphic designer.
But I still didn't know what school I wanted to attend. Of course everyone wants you to go to their Alma mater so those were the schools that I started looking into and applying to--- all which would leave to me acquiring college debt. I thought I had everything figured out when the college acceptance letters started rolling in. I did... until I received the financial aid award letter. They almost all consisted of some form of college debt.
$36,000 in loans!!! That is major college debt. Yes, I had received some scholarships from the schools, but most of the money that it cost to attend the school that I had my heart set on was in the form of loans, which is just college debt...

One Thing You Should Do To Avoid College Debt

One of the things that I failed to do in order to avoid college debt was to create a realistic list of colleges that covered all of my needs. Your college list should, of course, consist of schools that you or your child wants to attend, but that shouldn't be the only thing that you take into account. The school also needs to be a "good-fit" academically, socially spiritually, and politically. Most importantly, it has to be AFFORDABLE (not just for the first year, but for all 4 years of college). That means the student should not come out with much college debt. The amount of college debt that I would owe was the component that I didn't even think of when I went to apply to these colleges. The amount of college debt is also the component that everyone fails to mention when they tell you that you should go to their Alma mater. Affordability is so important. If you can't afford the school, you most likely will not be able to graduate or will struggle trying to afford the school so that you can graduate. And if you can't afford the school now, when you graduate that college debt will come into play when it is time to repay Sallie Mae. College debt is extra stress that no one wants.
So What Did I Do to Avoid College Debt?

My mother always told me that college debt was bad so I avoided college debt like the plague.

By: Shanice Miller, founder of DebtFreeCollegeGrad.com