It does hurt. On average, 2011 graduates carry almost $23,000 in student loans each, the highest debt load ever, according to the Wall Street Journal. I would call this a giant debt avalanche. According to various sources, total amount of student debt is somewhere between $850 billions and $1 trillion. For the first time it has overtaken the total balance of credit card debt, and almost 40% of students are in default. And these loans are yours till death does you apart, with practically no way out. The outrageous tuition, higher interest rates and lack of employment because of ongoing recession are the three obvious reasons. Less obvious yet likely the most important one is the lack of common sense among would be and existent students.

When you decide to go to college, because everyone should go to college, according to the kindergarten teacher, your parents and the president, you may want to see if the costs justify the end results. I knew a girl in my younger days who was very proud of her Master of Social Work from the University of Pennsylvania. 20 years ago, being out of state student, it cost her altogether $60,000 for 2 years and her total loan was $90,000. Her monthly payment was $450 and her monthly take-home pay was around $1,800. At least she had a job, but I bet she is still paying. These days, you don’t even have to go to Ivy League college to accumulate a very significant amount of debt. A more or less decent private university in Chicago, like Loyola or DePaul runs close to $25,000 for a year of undergraduate schooling. The same colleges used to charge less than $14,000 per year some 10 to 12 years ago. So getting 4 years of education in Liberal Arts, General Business or Psychology is hardly worth the trouble, unless your folks are paying and you don’t care about their money, and / or you have solid plans and necessary toughness to get an advanced degree which pays more, a lot more and most importantly is in demand. Understand that it is much better to become a doctor with $250,000 in student debt from not so heralded medical school, than to get a useless degree from Harvard and owe $100,000.

My friends daughter got her Bachelor of Psychology 5 months ago. 4 years of college and with a few scholarships, she now owes $70,000 in student loans, works in Best Buy for $10.50 in hour and lives with her parents. Has not had a single job interview in her chosen field. As every other student with loans, she must start repaying them 6 months after graduation, or go back to school which is what she is going to do. Not sure how many courses / credit hours she must take to get excused from paying, but she is certainly getting additional loan. By the way, the best way to judge a job market is to go to Macy’s, Target, Kohl’s or another large retailer in the area and see how many college grads are working cashier and other jobs.

As economy is getting nowhere, the job market is still very bad and the average salaries for newly minted graduates with bachelor degrees are lower than a year before. The delinquent loans of course, continue to grow, with unpaid interest, penalties, etc. being diligently added on a monthly basis. So if you want to get a college degree, choose carefully and don’t count on economic recovery. Most importantly, don’t blindly buy into general statistics that claim that unemployment among college graduates are much lower and incomes are much higher than those among less-educated. Such statistics are used to get more impressionable high schoolers into colleges to generate even more student debt, in my opinion. You will be 100 times better off working as a licenced plumber than an elementary school teacher.

If you are in school, think in advance and see if there are ways to get at least some of your loans taken care of. Here are several links that could be helpful,

Loan Repayment Programs – US Department of Health & Human Services
New Jersey Student Loan Forgiveness Plan For Mental Health And Social Service Workers
Iowa Student Loan Nursing Education Loan Forgiveness Program
Teacher Loan Forgiveness Application
Loan Forgiveness for Social Workers
NYS Licensed Social Worker Loan Forgiveness Program
Cancellation/Deferment Options for Teachers

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