<p>Article from Gawker.com on a Northeastern graduate with $200,000 in student loan debt.</p>
<p>[What</a> $200,000 in Student Debt Looks Like](<a href=“http://gawker.com/5696300/what-200000-in-student-debt-looks-like]What”>http://gawker.com/5696300/what-200000-in-student-debt-looks-like)</p>
<p>Some people have become engaged and then had their future spouse run away when they found out how much debt they were about to marry into.</p>
<p>unfortunately in this country it isn’t illegal to let people borrow way more than they can afford, whether it be for college or a house. I hope her parents didn’t cosign for any of that.</p>
<p>It is sad that we need laws to protect people from being an idiot</p>
<p>The year my oldest was “scheduled” to do foreign study I had to tell him no. I had a year of unemployment and while we are in much better shape than many, many who have been there done that the extra thousands of dollars for that non-necessary experience just weren’t there, the future uncertain and two more kids to put through college plus a retired husband as we are “older” than many parents. I have little symphathy for people that don’t have any common sense (or as Sue in Phily says “idiots”) and even less patience for people who say “oops now can you help me.” Hope she had a great 4 years because if she didn’t work hard then she’ll be working her butt off the next thirty.</p>
<p>Wow, that’s scary.</p>
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I think she realizes her mistake now. She posted a humble update on [a</a> website she set up for donations](<a href=“http://twohundredthou.com/]a”>http://twohundredthou.com/).</p>
<p>Holy cannoli… I can’t fathom having a $1600/month SL payment! Who cosigned those loans for her and what were they (and Sallie Mae) thinking? Does it seem like she took no federal loans? I see she’s raised slightly more than 1% of her total debt so far.</p>
<p>We need to bookmark this thread so that we can reference it whenever we have stubborn kids on CCs who insist that such loans are no big deal.</p>
<p>I don’t understand how it got that large. Didn’t she or her family pay ANYTHING during the 4 years she was in school?</p>
<p>MTB,</p>
<p>Our experience was the opposite from yours. The year D spent abroad in 2 different countries saved us $$$$ because her university lets/helps the kids apply directly to the schools. They then let all the FA/scholarships be applied to those programs. Some schools do it better than others.</p>
<p>Very scary story, especially since my D is applying to Northeastern. Students there go on co-op for up to 2 years and make money while studying. What happened with that for this girl? And what was her situation to start that she couldn’t secure any grants or scholarships?</p>
<p>It adds up fast if you are basically full pay. Look at the estimated cost for tuition, books, room and board, transportation and then if you have a spendo kid add that on. Some foreign study programs are subsidized but many it’s tuition plus some foreign study cost. There was a poster one time who said the student was spending over $700 a month for walking around money…there’s another almost ten thou. If you’ve got a student who goes Greek there are those costs. If this girl’s parents contributed absoutey nothing I can see easily how this came to $50 thou a year co-op or no co-op. Many frugal families can make it work for less than the college’s estimated costs but it takes financial restraint…something this girl did not have.</p>
<p>It’s because of these crazy loans, that Sallie Mae has changed its lending habits…interest progress payments are needed while in college and co-signers are needed for big loans.</p>
<p>The severity of my situation goes a bit deeper than “I owe this money, help me” - I am actually forced to live with my parents (forced = I am lucky! But…) as the monthly payments for just my private loans are currently $891 until Nov 2011 when they increase to $1600 per month for the following 20 years… attached is my payment plan. I also mentioned I have a job - which is great! And I probably have my college education to thank for that! Except there is still no way to make these monthly payments, and live on my own as a contributing member of society. Neither of my parents, nor I, really knew how this would pan out — unfortunately — and now that I’m here, I see no real light at the end of the tunnel.</p>
<p>Very sad…but at least she has a job where she can live at home. Many kids think that they can live at home and make big payments, but then either can’t find a job near their parents’ homes or their adult lifestyle doesn’t mesh well with still living at home.</p>
<p>*Very scary story, especially since my D is applying to Northeastern. Students there go on co-op for up to 2 years and make money while studying. What happened with that for this girl? And what was her situation to start that she couldn’t secure any grants or scholarships? *</p>
<p>What was her major? I don’t think EVERY major has co-op opportunities.</p>
<p>AS for private scholarships, those are often hard to get, for small amounts, and only for the freshman year. There have been kids who think a school is affordable based on one-time scholarship awards only to later realize those funds aren’t there for later.</p>
<p>*I don’t understand how it got that large. Didn’t she or her family pay ANYTHING during the 4 years she was in school? *</p>
<p>Maybe, maybe not. She may have been borrowing the full COA amount or the amount grew to that amount since these loans grow while the student is in school. </p>
<p>She mentions that she’s the first to go to college. Her family may have had earnings to high for much aid, but not enough money to contribute much.</p>
<p>How does anyone with the intelligence to get into a good college not have a clue about the debt they are getting themselves into. My daughter thinks she is graduating with a “butt load of debt” (her words) and her loans should be a smidge over $20,000 when she graduates. She is not the most money savvy person when she started college, but it did not take her long to grow up once she was there.</p>
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<p>It’s not an issue with the college, except possibly that Northeastern’s financial aid department fails to give its students the type of counseling that would discourage these sort of loans. My daughter applied to Northeastern. Somewhere along the way when she was accepted, we received a notice that she had been award $10K annually in merit aid. Northeastern was a safety for her – so we didn’t inquire further - I don’t know whether there would have been need-based aid on top of that - but the point is we had some sort of financial aid offer in hand which was probably more than what some students had and less than what others had. </p>
<p>It’s possible that the student made the mistake of thinking, at the outset, that she would borrow less over 4 years because of anticipated co-op earnings – but the bottom line is that she borrowed too much money in year #1 and kept on borrowing too much every year. </p>
<p>I agree that its hard for me to understand what people who sign up for so much debt are thinking. I can see parents running into big problems with PLUS loans and the like, because it is very possible that a parent with a good job might figure they can easily keep up with a certain level of payments, and then lose that job or incur other unanticipated expenses that changes their financial picture radically – but we don’t seem to read much about parents who are struggling with $100K or more of educational loans taken out for their kids. Maybe because parents are more likely to do the payment math at the outset.</p>
<p>Then again, the private lenders should never be allowed to lend that much – the student lenders should have underwriting limitations, and the laws should be reformed to allow excess loans to be dischargeable in bankruptcy. In fact, I think that anything outside the federal lending system should be dischargeable in bankruptcy – I understand the policy decision concerning loans that are subsidized with taxpayer money, but it doesn’t make sense to me that any private loans are treated any differently than other consumer loans.</p>
<p>Wow, scary…</p>
<p>^^</p>
<p>The article said that she had Sallie Mae loans. When started borrowing (around the year 2000), Sallie Mae would lend up to COA and not require interest payments (I also think it didn’t used to require co-signers). The rules have changed.</p>
<p>That doesn’t change the fact that on paper, she could have seen what the payments would eventually be. </p>
<p>$1600 a month is well over the cost to rent a small apartment in most parts of the country. It is as much or more as many people pay on their mortgages. </p>
<p>When it comes to borrowing… the bottom line isn’t the total amount borrowed or the interest rates – it’s the monthly payment. Deferred payments when interest is accruing is always a terrible idea, because you end up with a balance that is more than what you borrowed. </p>
<p>I can’t see any student expecting to come out of college with an undergrad degree and pay more than $600-$700 month in payments, tops. (I think half of that is plenty). There is some flexibility if payments are made over 20 rather than 10 years… but that’s a long time to be in debt for an undergraduate degree. </p>
<p>The bottom line is that I think it is a predatory lending practice for anyone to lend that much money to an undergrad, on those terms – without some sort of collateral or cosigner.</p>
<p>Oh god, I’m going to be in her shoes in a few years. Even with a doctors salary I have no idea how one pays off 300k in student loans.</p>
<p>^^^</p>
<p>I agree that she may have been shown some high payment at some point. We’ve all seen kids here on CC that have been told that if they borrow a lot of money, then their monthly payments are going to be $800, 1200 (whatever) and most of them are blinded by thinking that they’re going to be making a good salary when they graduate so it’s no big deal if $10,000+ each year is going towards loans.</p>
<p>They completely ignore the guideline that payments shouldn’t be more than 10% of your income of your first job.</p>
<p>The other issue is that the bank’s risk is limited. There should be a point were bankruptcy would be allowed. The maximum loans should be 5-7k a year. I blame the inexperience of the student, but I don’t excuse the banks, they know what they are doing. The only reason they can do this is because the student can’t file bankruptcy. do you thing they would give her a mortgage of that amount?</p>