20090407

Student Loans: A Silent Epidemic

I'm a believer that everything happens for a reason. I applied for grad school recently. It was my plan to apply for scholarships and grants to fund this endeavor. Before most organizations will consider you for funding, they require that you complete a financial aid package with the federal government; presumably to be assured that you're not deliriously wealthy, thus not needing assistance. Within weeks of submitting the documents required I received notice that I qualified for $10K in student loans per semester. That equals to $20K a year, and probably even more for summers if I showed good standing with the university. Strictly for emphasis, I was simply flabbergasted. I am one person. That means that most young people fresh out of high school will get grants, and still be eligible for student loans. That is a frightening thought. An 18-year-old, eager to get from under the roof of parents, has no genuine concern for what $10K a semester over four years is equivalent to. If my math is correct, that's $80K, plus interest! In some parts of the country this money would buy a modest home. I am concerned that the government is setting a debt trap for its unsuspecting citizens. Forfeiting on a student loan is not the equivalent of forfeiting on the dreaded credit card. A student loan stays with you til you pay it off, or die; whichever comes first. A recent conversation with some of my 20-something daughters left me frustrated for them. Either they have graduated, or at the threshold of graduating; and, most of them have student loan debt in the five figures. Fortunately a couple of them are seeking teaching certificates and have plans to work with a district long enough to get their loans paid off. At least that is a plan. But I can't help but wonder if they will be like many who never became certifiable because they couldn't pass the state exams; and went on to be full-time substitute teachers making a fraction of what contract teachers make. No matter how you dice it, a five-figure student-loan debt is a new car or a down-payment on a home. And this is what one must ponder before signing on the dotted line to attain funds to pursue a degree in, let's just say, film production. What young people must realize is that, unlike a grant, a loan will come due, eventually. It is very apparent that students are not leaving high school with significant knowledge of real-world education. They should not be measured on how well they know calculus or geometry; but instead, on how well they know the checks and balances of Student Loans 101. Ninth grade classes should include Family Planning 101. Failing an exam in the course would mean walking around with a battery-operated infant for a week, with a built in monitor to make sure it's in a certain parameter of the student involved. But to stay on task and not digress, Congress needs to query its constituents for alternatives to this current government-funded student-loan free-for-all. I believe that this reckless doling out of funds is indirectly to blame for our economic collapse. Recently, I read that 60% of people who have student loans are either delinquent or in default. That is alarming. And while listening to a radio talk show I heard conversations of people coming out of college and non-chalantly talking of having student-loan payments set up for 30 years! Thirty years; as in three decades of one's life? That would make the average person who paid faithfully, at least 50-something before they got out from under this debt, presuming they had no financial crises along the way. I'm reminded of the Bible verse that warns us that the borrower is slave to the lender. What a prime example this is! I have come to the conclusion that the only way to reap the most from the college experience is to pay as you go. For most that will mean going straight from high school to full-time employment. That will mean taking six hours at the local community college for the core courses and staying at home with the parents a bit longer. That, perceivably, is not a bad thing. The money saved by paying a lower rent, if they require it, would be well worth the leash on your potentially unhealthy party-habits. I calculated it once, and a student who took six hours each semester, summers included, would graduate at approximately the same time as someone who went to school full-time at an average of 12 hours a semester, excluding summers. I'm deeply concerned that the student loan crisis is taking our young people on a roller coaster ride that won't return to the exit station until paid in full. If the truth was told, most 18-year-olds don't have a clue what they want to be at age 25. I think the laws should be rewritten, to where only students seeking licensure should be eligible for loans. People wanting degrees in film production need to pick up a cheap camera and prove their worthiness for such a "fluke" of a degree; forgive my harshness. I think dropping classes, or doing poorly in classes, should make one ineligible for loans. I've heard too many conversations of students who have accrued debt, like water in a bucket. But unlike water in the bucket, student loans don't evaporate. If you are the parent of a teen who is about to graduate from high school, I suggest that you firmly stand against letting your soon-to-be 18-year old adult-child, begin digging this somber pit for himself. Since public school probably has not taught the lesson on the consequential deep abyss of student-loan debt then it is your obligation to do so in love. It's possible they might just listen. A few days ago, I broke down the deferment lesson to one of my daughters who recently graduated. She is eager to return to school to begin her graduate studies, and has chosen to defer her loans. She breathed a sigh of relief when she learned that the government would allow her to pay only the interest. She thought the $63. payment would not be so bad. That was until I enlightened her that over 12 months that would equate to over $700. And that the interest-bearing nightmare wouldn't end at 12 months; but instead, like a hamster on a treadmill, the lifetime of the loan. Suddenly, going to grad school on student loans no longer seemed reasonable; and even less so after I told her what that $700. would look like if she took this money and put it in her 401K for 30 years. America, it is time to wake up and get off the delusional gravy train. Very few things in this life are really gifts. Yes, God can use rare vessels to bring His Plan to fruition; but I place an emphasis on the word rare. If you want a college degree, and your only option is student-loan debt, get a job and pay as you go. Remember that the bottom line is: Colleges are merely another form of big business. They get paid up front when you pay to attend their classes. Once they deposit your funds, you are on your own with what you do with the classes you take. They are eager to advise you while you are a student; but be forewarned: Once you graduate, you're on your own for finding a gig. You'd be very wise to get a degree in something requiring a license. In this case, you'll earn a decent-enough salary to pay off any debt and sustain yourself. Use the rest of the hours pursuing whatever artistic passion you have until like a kite, you can get it to leave the ground, and soar on its own. Who knows? You may be like the thousands about to graduate and not have a clue what studies you really want to pursue. Remember, there is no law that states college must start the fall semester following graduation. There's no shame in taking core courses just to stay in the game until you get that glimmer of light of what you'd love to become. You may just want to become an artist. But at least if you pay as you go, you won't be burdened by the dark cloud of debt that looms for far too many, six months past graduation day. Sadly, I know of some who simply stay in school, and ultimately never graduate, in an attempt to put off the real-world reality of getting a job and going to work. That only lasts for a brief moment; because, be assured: The piper will get paid; whether monetarily or in denying you the precious luxuries of owning a home or a new car. Be wise, be prudent, and weigh the ultimate price. Is digging this somber hole of debt what you really want to do? It used to be said that college is for the wealthy. Thankfully there are sufficient government grants for undergraduates that take the teeth out of that truism. Attending college on just grants may mean not living on campus. Or it may mean living on campus and taking fewer classes. I'm not sure how that works. But I do know that student-loan debt is not for foggy-eyed children which is what 18-year-old adults are. Nor is it for people with the wisdom to know that paying five-figures for a piece of paper that may or may not cash in is far too financially risque.