student loan debt

student loan debt

What Are We Going to Do About Student Debt?

If you haven’t heard, President Obama recently signed an executive order that expands eligibility for the Pay As You Earn program. The program was created to cap monthly debt payments of eligible borrowers to no more than their monthly income. If you have outstanding debt after 20 years, or 10 years if you work for a nonprofit or in the public sector, your debt will be forgiven.

student debt

The program is great for those who are up to their ears in student debt, though it’s also a frightening thought that you may still be in that debt 20 years from now.

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“Hacking Your Education” Smartly Challenges the Benefits of a College Degree

“You wasted $150,000 on an education for $1.50 in late fees at the public library?”

In Dale J. Stephens’ book Hacking your Education, he makes a case for an alternative post-high school route. The book is his love letter to other free thinking people who have ever questioned their college education. It begins with a disclaimer: This is not a book about dropping out but rather about becoming empowered to make your own decisions. For a college dropout who bucked educational convention, he sure did his homework.

Stephens, a 20 year old wunderkind, has taken the time to productively analyze the quandaries frustrated college students have, but are too lazy to take to task.

The author has taken the principles of the unschooling movement, a philosophy started in the 1970s that encourages learning through real life experiences, and ushered them into the Internet and social media age. He has oodles of thorough advice on how to connect with like minded individuals in an attempt to foster your passions. Stephens accurately points out the loads of free, open to the public presentations on a wide variety of topics at university campuses everywhere. “Hacking Your Education” is all about identifying resources and sapping them dry. Read the rest of this entry »

Obama Administration to Reduce Student Loan Payments

President Barack ObamaThis afternoon, President Obama addressed a crowd in downtown Denver at the University of Colorado. Central to the President’s speech was the new “Pay As You Earn” proposal that the White House announced yesterday. The proposal aims to reduce monthly payments for student loans, by consolidating loans and capping payments. Starting next year, students will be able to cap their loan payments at ten percent of discretionary income, and after 20 years the debt will be forgiven. Current laws cap student loan payments at 15 percent of discretionary income with loan forgiveness after 25 years. According to a White House press statement, the proposal will benefit 1.6 million students at no cost to taxpayers.

“It can put more money in your pocket once you graduate,” Obama said in today’s speech, emphasizing that’s important for all Americans to have an equal opportunity to have access to higher education. “It’s important for our country’s future.”

In conjunction with the “Pay As You Earn” proposal, the Consumer Financial Protection Bureau will release a Financial Aid Shopping Sheet that will help students better understand the types of loans and finical aid that’s available to them before they go into debt.  “College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments. And we can do it at no cost to the taxpayer,” said U.S. Secretary of Education Arne Duncan in the White House statement.

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How to Avoid Debt to Pay for College

credit-cardsNo one ever said college wouldn’t be expensive. In fact, along with all other costs, college expenses are on the rise. Whether you decide to attend a community college for completion of your core classes, or spend all four years at a university, money is going to be a factor. Many students stress about the costs involved, while some students skip college all together because they can’t afford it.

There are a lot of resources to help you pay for college, however, including scholarships, grants, student loans and work study programs. Scholarships and grants are options that don’t have to be paid back while student loans must be repaid, sometimes along with interest, depending on the type of loan. Federal student loans, grants and work study eligibility are determined through filling out a Free Application for Federal Student Aid (FAFSA). Student loans are very popular among college students, but if you are looking to stay out of debt while in college, loans should be avoided.

Some of the best ways to graduate from college without any accumulated debt appear below. Utilizing some or all of these pointers will help you get out of school with no debt: Read the rest of this entry »

Generation Y to Struggle Financially Forever

Credit Card PaymentAccording to new published reports, students and graduates born between 1980-2000 are probably going to be financially screwed for the rest of their lives.

This report comes from financial advisor Lee Jenkins of Lee Jenkins on Money. He asserts that “They have high, unrealistic expectations and many don’t manage money very well.”

Even prior to the December 2007 recession the students were destined for doom. Their parents had the G.I. Bill and pension plans while they have expensive high-tech gadgets necessary for scholastic success along with an average of $23,200 in student loan debt come graduation.

Additionally, the entire generation faces economic struggles come graduation where they will encounter a decline in health benefits, chronic job insecurity, stagnant wages, and a soaring increase in basic living expenses while having minimal savings. Read the rest of this entry »

10 Ways to Reduce Student Loan Debt

Thanks to the rising cost of college, students are leaving college with overwhelming student loan debts. Can this be avoided? It’s pretty difficult to avoid student loans entirely, but with careful planning, there are both small and large steps you can take to reduce the amount of money you have to borrow. To reduce the frightening amount of money you’ll be paying off every month after you graduate, here are some tips.

  1. Graduate on time.
  2. Earn enough credits before college starts (through AP exams, community college classes, and so forth) to reduce your time in school. Or earn extra credits over the summer to reduce your total number of semesters.
  3. Go to community college for a year or two, and then transfer.
  4. Consider commuting from home (although, as this article in The Houston Chronicle points out, commuting is not as cheap of an option as it used to be because of the cost of gas.)
  5. Be realistic in where you choose to go to school. Ask yourself if that hefty price tag is really worth years of loans–or if a cheaper school can’t give you most of what you need.
  6. Invest a significant amount of time into finding scholarships.
  7. Buy used whenever possible–clothing, books, electronics, things for your dorm or apartment, and so forth. Used is good for the environment and good for your financial situation.
  8. Try to make do without a car–or to use the car you own as little as possible.
  9. Avoid eating out, and learn to cook.
  10. Avoid excessive spending on alcohol– unless you really think partying three times a week is worth thousands of dollars worth of student loan interest.


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