Thursday, August 22, 2013

How Much Will Your College Loan Payments Be?

It is amazing how many college students, 1) Don't know their total student loan obligation; and, 2) Don't know the amount of their loan payments.  This is especially puzzling since students will be repaying their loans for TEN years!

Don't get me wrong, I understand how it happens:  students borrow a little or a lot each semester and between school, part time jobs, and homework fail to keep track of all those loans--and they add up!

According to Forbes Magazine, "College graduates with the average $27,000 in student loan debt can end up making payments of over $300 a month for 10 long years. There are only so many dollars to go around, and because of the student loan burden, these are people who have difficulty carving out funds to save, pay down debt and invest for retirement. They may have to delay purchasing a home because they are paying up to 15% of their incomes for the college degree that landed them the job."

"Oh, well," you say.  "I have to go to college to get a decent job and it's expensive."  But does that expense relate to prosperity across a lifetime?

"The research found that students who graduate with debt wind up with significantly less wealth in the long term than those who didn’t. In fact, the researchers estimated that a combined $53,000 in student loan debt would result in a loss of $208,000 for a dual-headed household over its lifetime, since they’d have less to save and invest while trying to pay down their student loans."

If you're a current college student, track your debt and think about how much you have to pay per month once you leave school - and you better hope the job immediately upon graduation.

One student I know spent $108,000 going to school to be a social worker.  Her loan obligation for the next ten years:  $1242.86.  Do social workers even make that much a month?  The Bureau of Labor Statistics reports that a social worker can expect to make $42,480 per year.  That's $3540 per month before taxes.  Yikes.  BTW, The Bureau of Labor Statistics is a great resource for researching careers.

If you want to find out your monthly debt obligation, click on this link for a loan calculator that will tell you exactly what your student loans will cost you each month once you finish school:  http://mappingyourfuture.org/paying/standardcalculator.htm

What advice can you give college students to keep their student loans to a minimum?

22 comments:

  1. It is amazing that college student should pay off their college loan spending wasting their rest of life. This means that a student spend fiat part of their life studying at school, then they spend rest of their life pay for their education. In other word, their obligation of life is to serve the educational industry. How does individual achieve their personal goals? How does individual afford their family? How does individual serve the society? Does the society only need education?
    This let us revalue the education.

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  2. After reading the passage, I think that "how much will our college loan payments be" depends on a lot of factors, but, among them, the most essential one is our attitude towards our whole lives.
    For instance, if a student holds a negative attitude towards studying, his college time will actually be a waste of time. Of course, his college loan payments may be the whole four year college payments. No, not that little, because we cannot accurately estimate the cost of the time he wastes.
    Therefore, what I advise the college students to do to keep their student loans to a minimum is to hold a positive towards, not only the college studying, but also the whole lives in the future.

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  3. I was surprised to see this article because I did not know that many college students loan debt. Moreover, it is huge amount and it takes lifetime long to pay loan. As I began to live by myself, I manage my payment and keep track of that. It is because when I use credit card, I forget how much money I spent. It is same as college students. It is because their loan is higher than that, and they are responsible for their loan. If they do not do that, they will suffer from that later. Therefore, it is significant to check payment frequently and keep track of that. Moreover, students had better compare their financial situation to loan. If payment is too expensive, it takes time to return loan. There are many ways to achieve their goal, and they had better think other way to achieve their goal.

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  4. Before reading this article i knew that student debt was already incredibly high, but i had know idea to what extent. It's incredible to think that after school ten whole years will be spent paying off student loans. After graduation you assume that you are finally free from school when that's exactly the opposite. Especially when you are studying to become something that might not exactly make six figures a year. This article opened my eyes to how debilitating student debt cant be.

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  5. i knew that college was expensive and that I would most likely have to take out loans. but I didn't realize that ill most likely be paying that off for the rest of my life. after you graduate college there is no guarantee that you will get the job that you've always wanted. my father always told me to keep track of my money, so I know when I take out loans im going to have to really be on top of that. my sister had to take out loans and now she pays $350 a month and always has no money. she didn't keep track of it like she should of. this article really helped me realize that college is not cheap and you really have to be on top of everything now so that you can have a bright future. I don't want to be old and pay off a student loan.

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  6. Being in college is so stressful, not only because of school work but because of how expensive it really is. We are always told that to succeed in life and get a good career we must go to college. That at the end it all pays off. But after reading this article it is not worth taking out so many loans because it seems that in the long run it doesn’t give you an advantage. Keeping track of the college loans you do take out are important because you are going to have to pay it back. So many people don’t keep track because they are focused on their goals but sometimes you have to ask yourself is it all worth it at the end? I have not yet had to take out a loan and I am hoping that if I do it wouldn’t be for more than what my career will actually make me.

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  7. Getting a degree is becoming a gamble! I'm no gambling man, and I really don't want to have weigh the risk and reward of getting an education; it should be a no-brainer. Unfortunately our education system is expensive, and if your family makes too much money, and are unwilling to help with college, then it puts students in a bad place.
    I've been fortunate enough to qualify for financial aid when I turned 24, and have managed to pay my own way so far. I have successfully avoided student loans, and the pressure to succeed is still overwhelming. I can only imagine the stress and uncertainty students with six figure students loans feel. They are stuck in a high risk game that looks a lot like a Las Vegas casino, and not-so-much like the best education system in the world. I feel blessed to have seen the disadvantages of these loans at a young age and avoided them all together. Otherwise I too would be in the midst of the next financial bubble eager to burst. School shouldn't have to be a gamble.

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  8. It may seem redundant but just try to avoid the loans entirely. While it is good money fast, it is a debt that will persist far into your life. Why rush through college only to have to pay a bunch of loans. If you cant pay for your classes take it slow, maybe work full time for a semester and save up instead of buying the next video game. Think about what each dollar you spend on needless things instead of putting it toward the thing that will get you a job, your education.

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  9. This comment has been removed by the author.

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  10. I was surprised to see not many of my fellow peers brought light to other options college students are entitled to. For example, the most basic option for college students wanting to avoid loans would be, Financial Aid. Wherever you go, whatever school you are at, ALWAYS apply for financial aid. Students often think, "Well, my parents make decent money, I probably will not qualify for financial aid." My counselor advised me my first semester at DVC, reapply EVERY SINGLE YEAR, no matter what. Even if you or your parents have money, you may qualify for something, and anything will help. Secondly, scholarships are the next money source students often fail to remember. They will look at that one major scholarship opportunity offered at their college and think, "I'm not a genius..therefore I probably won't win that full ride." Sure, the chances of you winning that huge scholarship that your school advertises may not make you feel so confident--But what about other scholarships? Students struggle with scholarships because they often don't know where to look. Did you know that the company, "Band-Aid," (yes, the actual bandage you put on a paper cut) offers a nice scholarship available to ALL? Companies such as "Taco Bell" and "Coca-Cola" even offer scholarships to students. What we don't realize is that thousands of dollars each year of literally "free money" actually goes untouched. Students should change that. DVC has a whole department for scholarships, so swing by there and take advance of that free money.

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  11. I can so easily relate to this! I am totally afraid of college debt and I already have a couple thousand racks waiting to be paid off. I don't plan on taking out any more loans after this year, and I'm going to start making small payments pretty soon. #TeamNoDebt !!!! I think its important to not rely on one job and learn how to use your skills to create a constant income, along with your day job. #collegedebt

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  12. I am incredibly shocked at what most college students have to take out in loans for a degree that does not guarantee a job right away. In my opinion, it is not fair that college prices have incredibly gone up. However, I feel that we have the responsibility as students to be motivated, search for scholarships, and think more about the future not only for us, but for our parents. As for me, I knew that my college would be expensive and that is why I worked hard academically, earned five scholarships, and chose to commute. I knew it is going to be hard and time consuming, but I am committed to earn a degree without any student debt. I think this generation of students need to be more aware of the circumstances that school loan payments have.

    -Daisy Cabrera

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  13. In these times, It's nearly impossible to find a job out of college that's relative to your degree, because of the unemployment that now exist. College debt depends on the kind of loans you get for school, one should only accept grants, and subsidized loans. College debt is always a killer because students accept unsubsidized loans which have an accumulation interest over time even while your in school, which is ridiculous. How can they expect to you to pay this type of loan while your worrying about a degree and job to pay for extra student expenses like housing and food? By that time, students are broke and have no money to pay a loan that's rising at a interest rate of 3.86%. No wonder people want to stay away from college and the huge debt of loan payments that follow... But, ultimately, if you've the right mindset and degree for the future they shouldn't be a problem.

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  14. This article pertains to me in every way. I have been taking out loans for college every quarter since my freshmen year in the fall of 2011. I'm forced to take out loans because I have no other way to pay for my out-of-state tuition rate. I've learned over the past few years that any college student who is taking out loans from government really needs to analyze their current and future situation. I think a lot of kids who are getting ready to go to college want a "real" college experience, the one you see in the movies where there's frat parties every weekend and crowded dorms with double occupancy. Unless your family is rich and can pay for your dorm and tuition, I'd say live with your parents! Go to a college that is near you and stay with your parents as long as they let you. Don't think that you need to leave your state and pay a hefty out-of-state tuition at another school is going to give you that "real" college experience. The goal is to get a degree in something that you enjoy, so don't sacrifice that by putting yourself into thousands of dollars of debt that you will have to pay off for years and years. Borrow the very minimum amount that is needed. How are you ever going to buy your dream car or house if you're already into debt before the age of 20? The loan calculator and occupation outlook are great resources that can help students become more aware.

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  15. As if being a college student wasn't enough work. I have to hear this from everyone, teachers, students, alumni's, and now a computer? This just proves my point about why we have to waste our time in school when we can just start right off the bat in working. For me my career choice has to pertain to acting. More than half of documented actors act with a high school diploma. I'd like to see which actors those are. You enter school thinking that's it's going to help you and yet it cripples you for the most part. Now mind you, this isn't the case for everyone because if it was, the US would be in serious troubles. But how many of those 1 per-centers do we actually get in this world. Exactly that, 1%. If we were playing Texas Holdem, I would have to fold.

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  16. This article made me think about how much I do not worry about my student loans and how much of an impact they will have on my life in the future. When I came to school I knew I would be here with financial aid grants and loans there was no other option. After reading this article I now see how much these loans will affect me in the future when I get my future job these loans will still be a burden in my life. Everything in the article makes sense as far as having so much to pay toward loans that it could prevent from purchasing a home, investing into your retirement, or even leave you in debt for the rest of your life. Even though student loan debt it something that will haunt me forever I knew that this is what I signed up and in this day in time there was no other I could pay for school. After reading this article I just know in the future I will have to manage my money so I can have a comfortable living and still be able to afford to pay my student loan debt. A loan is something that I signed up for and I do believe it is possible to have a comfortable life and still manage debt.

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  17. This article says a lot many people don't know that loans will be with you for the rest of your life until they are paid off. I knew i was getting grants and money from school, but that wasn't enough to put me through college so i had to take out loans. My uncle went to college and i had some knowledge of what loans really were, but even that really didn't help me. I know I'm going to be paying for loans after college simply because of the major I am taking. I don't want to wait to pay loans I want to start before i get out of college if i can so it won't be a huge burden on me and the job i choose. I believe with my job i can live nice and pay off my loans in the near future.

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  18. This article is stating that the average student loan debt is $27,000 for graduate college students but if you think about it a brand new car can cost between $22,000 to $30,000 depending on the brand and type of car. A college loan debt and a new car are approximately the same amount. So once finishing college instead of buying a brand new car, start paying off loan debts and your financial life will be fine and if you pay extra money each month you will finish paying off loans sooner and not pay a lot into the interest rate of the loans. Students need to plan out their financial life ahead of time so they can be prepared and not stress later on in life.

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  19. These statistics don't surprise me, I already knew student loan debt was high and will only continue to increase. The advice I will give is to number one, create a savings account at an early age and start saving for that college fund. Number 2, apply for financial aid and if you can't afford financial aid then ask your parents for help. If all that fails then take out a loan. This article is making it seem like $300 is a lot a month, that is chump change depending on you job but in most cases if graduate college you are bound to get a job that pays $60k at the least every year. So I advise college students to stick it out because at the end it will be worth it. Yes you will be in debt but not for long depending on your job and how much you decide to put down on your payments. Stick it out.

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  20. Coming from a current college students perspective, the idea of debt is always in the back of my mind. Finances are a big responsibility and it can be tough for an 18 year old to deal with. I want to be an English teacher once day, and that in my case requires years of education past high school. Coming into college, I understood what I would have to do in order to afford a college education. Its safe to say that most people know about how high student loan debt is and it just has to be dealt with. Yes, it is unfortunate but in all reality, it probably wont change anytime soon. I think before anybody invests in a college education, they need to look over different alternatives that will work with their needs and demands before making any decisions.

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  21. I don't know personally how much my college loan will come out to because I am not finished with school yet. I am not even close to graduating so I know it's going to be a scary scary number. I always do think of the mentality that, I am going to earn a lot more money after I graduate and get a good job. Reading this article, it actually scared me about loans. It makes me want to go start paying for it already. But my advice is try to apply for more scholarships and take as much grants, lessen the amount of money you will borrow from where you are loaning money.

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  22. Everyone who attends college already has the idea of how much it is going to cost them. But as an attending student- in need of money would take out loans to help them get a step further in their education, but ten steps back when it comes to paying it off. This article is telling us that it will take a person 10 years to pay off their college education. Personally, I hate the idea that loans are practically a trap for the student. It's a Trap because Loans will be apart of your life until it's complete payments are done. My goal as a college student is to see if I can achieve college without any loans. I'll try to not take out any loans- and see if I can do it on my own. For future college students I would recommend Scholarships ! They are the best to go in this case.
    Also planning out your expenses, and if you are going to take out loans make sure you can handle the payments in the future.

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