While it’s not morally right to feel better because of another’s misfortune, this story may have students across the country feel just a bit better about the amount of money they will owe in student loans upon graduation.

According to the Wall Street Journal, Michelle Bisutti, a 41-year-old woman from Columbus, Ohio borrowed $250,000 to pay for medical school in 1999. The debt has since increased to $555,000.

Part of the spiraling effect is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates, according to the Wall Street Journal. While in school, her loans accumulated interest with variable rates ranging from 3 percent to 11 percent.

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Guest blogger, Chris Birk, a principal at SuretyBonds.com, is a former newspaper and magazine writer and college professor. His work has appeared in more than two dozen newspapers and magazines, including the Chicago Sun-Times, the St. Louis Post-Dispatch and Insurance Journal.

Students preparing for a post-secondary education or career have a lengthy checklist to pore over before making a decision. Amid the excitement, students and parents can easily forget to take a long look at the background and financial standing of a potential school. And that can wind up costing them thousands in lost tuition dollars.

In the last few months, several private vocational and technical schools have closed suddenly, taking millions in pre-paid tuition costs with them. Most states have minimal safeguards in place, but the reality is that many consumers will struggle to recover their money.

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Another spring semester is about to start. We are half-way through the school year, which means we are half-way to summer break. It also means that it is almost time to start filling out those FAFSA forms for next year.

What is the FAFSA? The FAFSA stands for Free Application for Federal Student Aid.

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Applying for student loans can be very confusing and difficult. Do you need a subsidized loan or a Perkins loan? A Stafford or a private? Here’s a quick rundown of what the different types of student loans are.

Stafford Loans: These are federal loans. They come directly from the government through the Federal Family Loan Program. These require the FAFSA to be completed by the student.

Subsidized Loans: These are a type of Stafford loan and are designed for students who demonstrate financial need. While students are in school, the government pays the interest on these loans. Read the rest of this entry »

It’s a correlation no one can deny. As college tuition and fees continue to rise (up 50% in the past 10 years), so does credit card debt. As fewer families have the cash to support college students, more students are charging their tuition, books, fees and other living expenses just to get by.

According to Sallie Mae, the average undergrad has a credit card bill of $3,173, up a startling 134% from $2,169 in 2004, and the highest amount since the organization began tracking in 1998. It seems that tenure in school correlates to debt as well, with seniors owing twice as much as freshmen.

This new study from Sallie Mae uses March 2008 data; due to the state of the economy since then, they warn the actuals for 2009 could look worse. Read the rest of this entry »

How to Get a Student Loan

According to a report from the National Center for Public Policy and Higher Education, college tuition and fees increased 439 percent from 1982 to 2007, while median family income rose just 147 percent. You don’t have to be a math professor to see how that sort of trend puts amazing pressure on students and their families to find ways to pay for a college education.

If you haven’t saved enough money to pay for your education, all is not lost. Financial aid has more than doubled in the last decade. And while the recent credit crunch has made it even more difficult on those in need of financial assistance, you still have options. We’ll show you how to tap into public and private sources of aid.

Loans for higher education come in three major categories: student loans, private student loans, and parent loans. Let’s take a look at each option. Read the rest of this entry »

Dear Mr. Obama (soon to be Mr. President),

I am a former college professor and a writer who specializes in educational topics.  As such, and as the mother of a young child, I have some serious concerns about education in the United States.  I know you do too, so I thought I would write you a wish list of the changes I hope you will help bring about.  Yes, I know the economy is in the toilet and that you might not be able to grant me all of these wishes right now, but since you are putting together a substantial package to stimulate the economy, I hope you will be keeping education in mind.  After all, if we don’t educate our children well, how will we compete in the global economy?

First, I hope you will take some serious action to make college more affordable to Americans.  In the past 25 years, college expenses have increased at three times the rate of family income, and at the rate we’re going, it’s quite plausible that in the next few decades, a college education will become unaffordable for most Americans.  I know you agree with me that this is unacceptable in America.  Students need more access to financial aid, and not just student loans, since it’s not fair for students to start their careers buried in debt, and state schools need better funding so they don’t need to rely so much on tuition. Read the rest of this entry »

These days, it’s common for college graduates to enter the workforce while burdened with overwhelming amounts of debt.  And it’s probably no surprise to anyone that the total amount of debt for the average graduate is rising.

Here’s a great resource for students and anyone else who’s concerned about student loans: The Project on Student Debt, a watchdog organization. In a recent study, here’s what the Project on Student Debt found out about student loan debt in America:

• Between 2006 and 2007, the average total loan debt of graduates rose from $18,976 to $20,098, which is an increase of six percent.  Yep, that’s right, the average student now graduates with over $20,000 in loan debt! Read the rest of this entry »

The two candidates couldn’t differ more on any hot-button issue you toss in front of them. Their positions on supporting American college students is also quite the contrast, as are their individual college experiences. Obama attended Columbia and Harvard, and only recently paid off his student loan debt; McCain attended the U.S. Naval Academy, which was free.

Amongst a crashing economy where college tuition support is harder to come by, and college tuition is skyrocketing faster than inflation, one candidate is in favor of the government lending support to college students, while the other thinks that you should cram in a night job between an 18-hour class schedule- plus labs and study groups. While they agree that college tuition isn’t affordable to most Americans and that the process to attain that aid is convuluted- the similarities part there.

“McCain’s message when it comes to increased tuition is, ‘You’re on your own,’” says Michael Dannenberg, senior fellow with the New America Foundation and not a member of Obama’s campaign. “Obama’s message to families is, ‘We’ll give you more financial aid to help you with college costs, but your kids are going to have to help others.’”

Obama’s plan is more detailed than McCains, albeit with a larger price tag. His position is that it’s the government’s job to support college students persuing a degree. He’s not giving it away- in exchange for 100 hours of community service each year, the government will offer students a $4,000 tax break. McCain has put focus on making the financial aid system more efficient, but does not intend to increase its breadth. He wants parents to be more informed and says more money can be available if we eliminate wasteful spending. Read the rest of this entry »

Add foresight to the list of Generation Y’s credentials. A recent survey by Experience Inc. indicates that students are planning now for paying off their student loans- 47% said they chose a career path based on their student loan impact.

“College graduates are taking preemptive measures to deal with the financial ramifications of student loan debt,” said Jenny Floren, founder and CEO of Experience.

About two-thirds of students currently attending college are likely to accept employment with a company offering loan repayment or assistance. And sadly, nearly half of students surveyed said they’d accept a job with a higher paycheck, even if it meant not being happy with the job, as a means to pay student loans.

It’s definitely a signal to HR directors everywhere- the next time you revisit employee benefits, a student loan program is going to be imperative to attract the next generation of employees.