Undergraduate > Graduate Loans

cptofthehouse
Sun, 18 Jul 2010 18:23:45 +0000

The problem with loans today, is that the amounts needed to pay for a private school,room, board and other costs is so much more than what your parents had to pay. Not just in absolute dollars but in terms of percentage of income expected. Even those contemplating medical school are hesitating about taking loans since doctors’ still high salaries are not keeping up in proportion to medical school costs. For undergraduate degrees, it’s even a worse problem. Kids can end up $60-80K in debt when they take out private loans on top of government ones, and have trouble finding a job paying more than $20K a year, if that. And it’s not as though they can look forward to a big salary increase in a few years. How can they repay that monstrosity of loans?

We had a difficult time paying loans at a lower interest rate, when our annual pay exceeded the full amount owed. It was like a toothache for years as we repaid it. With the pay/loan ratio so much smaller for graduates who take out a lot in loans and with the higher interest rates, it’s a much bigger problem. Like impossible. Your mother may not be aware of this change in situation. Also, your earnings may not be much affected by the fact that you went to a much more expensive school than state/local options. You just put yourself in a lot of debt for a long time.