ANCHOR: By the end of 2001, more than 2 million recent college graduates were expected to begin paying back billions in student loans. Which is fine, if you found a job after graudation.
ANCHOR: But the poor economy means out of work grads are having a tough time
making ends meet. Money and real estate expert Ilyce Glink has some suggestions on making the numbers work.
SB1: Student 01 16 23
“I owe about $5,000 in student loans and 5 or 6 thousand in credit cards”
SB2: Student 01 17 40
“In student loans I owe about $9,000, and maybe $1,000 in credit cards
SB3: Student 01: 23:09
“I owe about $15,000 right now….I’ll owe about $20,000 when I graduate. I think about it all the time, yeah.”
IT COULD BE WORSE, YOU COULD OWE A HUNDRED THOUSAND DOLLARS AFTER GRADUATE SCHOOL. AND SOME DOCTORS ARE ENTERING THE WORKFORCE WITH AS MUCH AS 1 MILLION DOLLARS IN DEBT. ADD SCHOOL LOANS TO CREDIT CARD DEBT AND IT’S CLEAR THE 25-AND-UNDER POPULATION HAS ALREADY MORTGAGED ITS FUTURE — SABRINA WILL BE $60,000 DOLLARS IN DEBT WHEN SHE GRADUATES WITH HER MASTERS IN SOCIAL WORK.
SB4: SABRINA 01 01 55
“IT WAS A BIG SOURCE OF STRESS FOR ME, BUT ULTIMATELY I DECIDED THE DEGREE AND THE EDUCATION WAS WORTH THE DEBT AND I COULD THINK ABOUT THAT LATER.
ONCE YOU GRADUATE, “LATER” COMES UP SOONER THAN YOU’D EXPECT. STUDENTS GET A 6-MONTH GRACE PERIOD BEFORE THEIR FIRST REPAYMENT CHECK IS DUE. THEN, REALITY STRIKES — OR BITES!
SB5 SONYA COLEMAN, ACCOUNT EXECUTIVE, SALLIE MAE
“IF THE STUDENT IS HEAVILY BORROWED, HAD A LOT OF DEBT, THAT AMOUNT COULD BE AS HIGH AS A MORTGAGE. IT COULD BE AS HIGH AS $600 TO $800 PER MONTH”
THE REALITY IS, YOU’LL OWE THE MONEY EVEN IF YOU DON’T HAVE A JOB. BUT HERE ARE A FEW OPTIONS. YOU CAN DEFER PAYMENTS FOR A FEW MONTHS, OR CONSOLIDATE YOUR STUDENT LOANS AND STRETCH OUT THE REPAYMENT PERIOD FROM 10 TO 25 YEARS.
THERE’S AN INCOME-SENSITIVE PROGRAM, WHERE YOU PAY A SET PERCENTAGE OF YOUR TAKE-HOME PAY, OR A GRADUATED-PAYMENT LOAN WHERE YOU PAY A LITTLE UPFRONT AND MORE DOWN THE LINE. YOU MIGHT ALSO BE ELIGIBLE FOR A RATE REDUCTION IF YOU’VE PAID ON TIME FOR 4 YEARS, OR IF YOU OPEN AN AUTODEBIT ACCOUNT. AND THERE’S ANOTHER OPTION — YOU COULD GO BACK TO SCHOOL.
WAYS TO LOWER YOUR SCHOOL LOAN PAYMENTS
CONSOLIDATE AND STRETCH OUT PAYMENTS (10 TO 25 YEARS)
GRADUATED PAYMENT LOAN
RATE REDUCTIONS FOR ON-TIME PAYERS
AUTO DEBIT ACCOUNT
GO BACK TO SCHOOL
SB6 SONYA COLEMAN
“IF YOU GO BACK TO SCHOOL, THAT WILL POSPONE PAYMENTS, KNOWN AS AN IN-SCHOOL DEFERMENT, BUT INTEREST WILL BE ACCRUING.”
SB7 01 17 17
“DO YOU THINK ABOUT YOUR STUDENT LOANS?”
“ACTUALLY, I THINK ABOUT IT EVERYDAY CAUSE I KNOW IT AFFECTS MY CREDIT. MY MOTHER TAUGHT ME PRETTY WELL, BUT I DIDN’T LISTEN SO NOW I’M BEING PRETTY BADLY AFFECTED BY IT.”
IF YOU’RE RUNNING INTO TROUBLE PAYING YOUR STUDENT LOANS, CALL YOUR LOAN SERVICER TO GET THE BALL ROLLING BEFORE YOU START PAYING LATE OR MISSING PAYMENTS. AND LET YOUR SERVICER KNOW IF YOU MOVE, OR GET MARRIED OR DIVORCED. BECAUSE HOW YOU HANDLE YOUR STUDENT LOANS WILL AFFECT YOUR CREDIT
HISTORY FOR THE NEXT 10 YEARS.
BETWEEN 1990 AND 2000, THE AMOUNT OF STUDENT LOANS IN THE U.S. DOUBLED TO MORE THAN $37 BILLION. ONE UNSETTLING FACT IS THAT RECENT BANKRUPTCY NUMBERS SUGGEST THE NUMBER OF UNDER-25-YEAR OLDS FILING FOR BANKRUPTCY IS INCREASING FASTER THAN ANY OTHER AGE GROUP.
Published: Feb 5, 2002