You know exactly what the amounts of the loans are and what the repayment schedule is. It's right there on the paperwork you sign to take out the loan. The problem is that most kids are too excited to just be going to college that they just sign the paperwork without actually reading and understanding it.

And if your wife's EFC was really $0, there are plenty of grants and tuition reduction programs out there if you just look around for them. My daughter's roommate got a full ride at Boston University because her parents couldn't afford to pay anything.

Many of these colleges have extreme endowment money, some reaching as high as a billion dollars. They are charging extreme tuition dollars due to the amount of foreign students whose parents can afford it. Meanwhile, many American kids and families are getting screwed. The parents also must guarantee the loans. College costs rising at 9% per year is criminal. They are building monuments to themselves. Try putting 3 kids thru college today....hold your ankles.

The way to avoid student debt is to work for a company that pays your tuition, like UPS. Get a job, get the tuition assistance, and you won't have the debt.

The simple solution is to avoid the debt in the first place. I worked my way through college. It took 7 years because I had to work full time and go to night school most of the time, but when I graduated, I didn't owe anyone one red cent.

It amazes me that so many college students are unclear on the concept of delayed gratification.

One big problem with student loans is the Department of Education's Student Loan program and policies.

After completing the application for our son, we were denied a Federal Student Loan, because our gross income was too high. While our total Adjusted Gross Income might be high, they don't consider your expenses (e.g., home mortgage, car payments, or other living expenses). Out net disposable income wasn't enough to self fund our son's college cost, so we had to seek private loans, with very unappealing terms.

Interestingly, all the proposals I've heard from the Obama Administration regrading dealing with this issue only apply to Federal Student Loans, which I don't think would help us out, which seems a bit odd. Sort of like coming up with some new gasoline price reduction program that will apply only to those driving GM manufactured cars.

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http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment

I live in a college town, and have worked around many college students for several years. This is what I have observed to be the NORM.

They take out loans that include living expenses. STUPID. Doing that exempts some of them from finding a job during the school year. So I am saying the pressure is off. We employ a lot of college students and half the time they never even cash their checks because frankly they have enough money from other sources. Strangely, we have to remind them to cash their checks.

A huge percentage of kids are graduating with worthless degrees. So the chances of finding a job in their field are extremely slim no matter where they look. Once upon a time, any degree was a stepping stone, but now. A very small percentage of grads are in the math and science field. The one student I knew that did have a science degree got a very good job ASAP that pays well. She also worked during her 4 years and had tons of experience in her field before graduating.

I had child that I wanted to attend a very expensive private school. The school fit him like a glove, but he would have had to work really hard. He was more a social kid that had skated through high school with good grades, but once alone he probably would have goofed off. So even though he was offered many scholarships to attend some prestigious schools, he was not the right material at that time. So we sent him FREE to our community college to grow up. He had an academic and athletic scholarships. He then transferred all that to a 4 year univ and graduated. He did play a lot having still not grown up much. Even then decided to go to graduate school which was 100 percent paid for with grants. He was smart, just lazy IMO. So between him working a lot during school, getting good enough grades, his education through graduate work cost us out of our pocket about 8,000.

The best deal I have witnessed first hand is a work study degree. I once worked for big pharma and they hired students through certain school programs. So they worked a semester or two and then back to school for another couple semesters. They got valuable work experience, made VERY GOOD money, and none of them had any debt upon graduation. They all eventually got hired through the company and many went on to be top managers in the company. I really loved that program.

When I was growing up, we got counseling that was honest and helpful. If we were not college material we were told that. Our counselors helped pick schools we would excel at. I went to a very good high school that had a high graduating rate and many did go to college. The kids today are shooting for the moon and not being realistic. My niece and nephews racked up lots of debt, much that was never paid for, because they got poor advice from their mom and dad that never cared about how much anything cost. We have lots of parents like that today.

When my husband decided to got to college from high school, he had to get a private loan which back in the 70s was not the typical. I remember going with him and it was a struggled to get that money. We had to drive hours from our town to find that money. The bank impressed on him to only borrow what he really needed because he had an obligation to pay it back. My husband worked a lot during college to pay for everything possible and limit his debt. He went to a very well known university and graduated in pre-med in 3 years. Our monthly debt for 8 years was 43/mo. That seemed like a lot to us and we double paid it to get rid of it.

The problem today is that our society believes that money grows on trees and that there is an unlimited amount of it. So we have a cultural issue and we are mathematically challenged as is the WH.

Before the government gets their act together, individuals must learn to value a penny saved and not waste money. When that happens, if it ever does, we will stop circling the drain.

A huge percentage of kids are graduating with worthless degrees.

That there is why student loan debt is a bigger issue than it otherwise would be.

When I take out $100000 to get a degree in "English" and cannot pay it back because the only jobs I can find are fast food, I have nobody to blame but myself. However Gen Y (of which I am a member) doesn't seem to have personal responsibility, so instead we blame the big bad banks and opt to occupy Wall Street.

Join the military to get educational benefits OR marry someone in the military (or a veteran with disability benefits) who gets education benefits for both him/herself and spouse/children. These benefits may apply to universities, trade schools, and even graduate school, depending on circumstances.

Taxpayers should know that many military members and veterans qualify for free tuition and fees at colleges, and that those benefits may also apply to their dependents (spouse and/or children). So it's not only the expense of sending troops to useless wars in Iraq or Afghanistan, but we'll be paying them disability benefits, lifelong healthcare for them and their dependents, AND paying for their education as well as for their kids' college. Wow.... that's a lot of tax $$.

If the veteran is declared 100% "service-connected" disabled, he/she and dependents may, in addition to tuition and fees, be paid living expenses and some other expenses while pursuing a degree. This applies whether or not an injury/illness was incurred in battle or just in the course of daily life.

Disabled veterans unable to work at any meaningful job due to injury/illness can also apply for Social Security Disability benefits (SSDI). These benefits include money for both them and their dependents and supplements their VA benefits.

To The Boys: Well, work study is fine and dandy .....unless you are studying to be a medical doctor. If you know anything about the requirements of study to become the doctor that is going to work on you when you need his/her skills there is no time to 'sling pizza' in a job while you are in med school. Also, you have to relocate in order to completed what is required of you. The only actual time in the classroom is the first two years. Unfortunately, the loans of a medical student at the end of their education are approximately $250,000. I have two daughters that are doctors. One is a medical doctor and the other is a veterinarian they both have these high debts. They could have chosen to save money and become cocktail waitresses in their lives but they chose not to. Yes, they are struggling. Surprise! Doctors in either profession do not always make 'lots of money' like most people think. Actually, college is fast becoming something most people are going to shrug off unless they have high society parents that push their kids into school whether they want it or not. The rest of the people are figuring out that college does not usually help you get a job and even if you get one it won't be comensurate with your education.

There are ways to avoid huge student debts. I graduated a year ago with no student debt with an associates. Sure it's not a bachelors but I'm working on it, and can easily transfer the credits to a public university later on. It's not one big thing that will help but many little things.

I went to a cheaper local community college, worked part-time, applied and received Federal and state grants, scholarships, tuition reinbursement from work, and shopped around for the cheapest books.

Usually the college/university bookstores will know what books are required several weeks before the classes start. It's funny how I see parents and students buy them at full retail without realizing you can shop around. I just go there to get the title and ISBN number of the books that are required then go to www.gettextbooks.com . Tells you the cheapest places to get those books. I would get usually 1/2 of the cost by buying them online. I once bought a biology book that was international version (only difference was it was a softcover not hardcover) for 60 bucks new. They was selling the same book at the college bookstore for 350. Cost of books is usually 1/2 of the cost of tuition. Amazon has a free prime membership for students for 1 yr. That is free 2 day shipping. Even buying there tends to be more cheaper than the local bookstores. That is if you find out what books are required before the rush of other students come and buy everything up. Usually 1 week before school starts.

When I turn in my scholarship paperworks every semester, the people there stating that not many students hardly apply them so I always get approved. I guess its easier to just apply for loans and forget about it eh? It's free money that not being utilized.

Work? What is a better way to keep debt down by working part time plus have tuition re-inbursements and work experience. I guess some kids rather party and put everything (living expenses) on loans. Can't put "I can drink my body weight in alcohol" on the job application.

A buddy of mine is going to a expensive University. Even with grants, he is paying 3k per semester in student loans. I told him why go in to debt, go to a community college. His response was "its for the experience". Well he is going to pay for that experience for a while.

If I had a choice of a degree from a elite university with 50k in debt or a degree from a local public community college --> public state college with no debt....... I choose the second option. It's still a degree and employers mainly concern about work experience. I rather spend 50k on a nice car than a paper degree. It's kinda sad. I have a associates degree at a local community college and there is another co-worker with a bachelor degree at a private university with debt of 60k. We both make the same amount.

I am graduating with my AA degree in December. It will have only cost around $1600 because I took many college courses while still in high school. After that I plan on working for a couple of years to save up money before I decide on whether or not I want to continue my education and get a Bachelor's. I think it is silly for all of these kids to just hop straight into college without first experiencing the world. How can you know what you want to do if you haven't really had a chance to see what all is out there?

1. Have a plan for a degree that will get you employed: engineering, accounting, nursing, computers, etc.

1A) Kick butt in high school. Grab every AP course you can handle. At many universities, AP classes count as college credit. Smart kids are getting done in 3 or 3.5 years using AP. Work every summer. SAVE YOUR MONEY!!!

2. Freshman and sophomore years at your local community college. Live in parents basement and have a job at McDonald's. Make sure you keep your plan in mind so all your credits transfer to State U for your junior and senior years. Many CCs have superior education to the big state school. Smaller class sizes, better access to instructors, etc. Work hard and apply yourself. You don't want to graduate Community College with a "C" average. You want to kick butt.

3) Junior and Senior year at State U. Try to live at home and commute if at all possible. GET DONE IN 4 YEARS OR LESS! Work during summer ( be sure to get paid; unpaid internships are stupid)

This is very possible in most areas of the country. In the Chicago metro where we live, there are numerous community colleges in driving distance. There is a 4 year state school in downtown Chicago. If you can spare the $$ and want the "college experience" you can live downstate on campus for two years.

Don't worry about what your friends are doing. Don't worry about getting the "college experience". You will get plenty of experiences and you will wind up debt free.

Sadly the college industry has foisted expensive private schools and out of state tuition on kids for years. College costs will moderate only when parents and students revolt.

When I moved my daughter into the dorm here at a Michigan public University we were concerned about whether computers were ever stolen etc. and the Dormitory Manager told us this . . .

"EVERYONE IN THE DORMS HAS REALLY NICE ELECTRONICS. ABOUT 3 WEEKS AFTER THE SEMESTER STARTS THEY GET THE REMAINING LOAN AND PELL GRANT MONEYS FROM THE FINANCE OFFICE after Tuition is paid and he said YOU WILL SEE THESE STUDENTS BUYING THE NICEST COMPUTERS, TELEVISIONS, CARS, ETC." And he was RIGHT!!!

All paid for with STUDENT LOAN DEBT!!! And then when they graduate Obama will forgive that Debt . . . because it is so terrible and they didn't know the implications.

It is really almost a CRIMINAL RACKETT!! It is puffing up the Education Sector of the economy like the Housing sector of the economy was Puffed up for Years.

obviously you are smart and researched your career. Now , work all summer and take out a 100k in debt for an undergrad english major or "psychology' degree from a major school with no teaching degree.! It might take you 100 years to pay that off. Yet the schools are allowed to fill this stuff and promote placement. Its bernie madoff twin !

This is good advice, although admittedly summer jobs for students are getting harder to find. Another step would be to forgo partying while you are in school and work a part time job instead. If you can not find a paying job, an unpaid internship could greatly help your job prospects as well as starting salary upon graduation.

The advice in this article about taking your core courses at a community college is also a very good option. You can take these core freshman and sophomore courses at a local community college, keeping your tuition costs low and living at home to avoid room and board costs. You can then transfer to a more prestigious university for your final two years to take your professional level courses and get your final degree. This will help keep your student loan debt down considerably.

Finally, give very serious consideration to your major. If you are going to spend the money on getting a college education, it should be in a major that has decent career prospects after graduation. Spending a fortune on a liberal arts degree like art history may fit your personal interests, but it is not going to do much for you when it comes to finding a decent career path following graduation. If this is something you are interested in you can always take a few courses after you have graduated and started your career to satisfy your personal interests. People need to face facts and realize that their personal interest areas may not be good choices for majors since there are no career prospects. Running up huge debt based on personal interests does not make sense if those interests are not going to lead to a career that will allow you to pay off the debt you incur. You can always follow those interests as a hobby or take classes to satisfy you interests after you have established yourself with a decent income that can support you.

I have an undergrad English degree. I am employed in a field totally unrelated to my degree, and I make good money. I am paying off my debt like everyone else.

People think you have to have a career in a field related to your degree. I would have LOVED to have been an editor or a writer, but it was not in the cards. I got a job where I am fulfilled and I work hard, and because of that, I am happy.

You're right -- not many people are going to get a job in philosophy (what would you do with that anyway?), psychology or art. If you look outside the box, however, you'll be fine.

People are far too idealistic about careers. Do what makes some money so you can live comfortably or advance your experience to climb the job ladder. End of story.

Hey JS, fyi - It doesn't have to be one or the other, you can work part time in college and still do some partying (everything in moderation, of course). I did :).

dassala:

exactly. I have a degree in Computer Information Science. Couldn't find an exact computer job in my area so I went into the Instrumentation field in industry because it is becoming computerized and physically working on the instrumens and electronics is similar to working on a computer (almost all the newer instruments have boards similar to computer motherboards). Is this what I thought I'd use my degree for? No way. But now I have an opportunity for a job anywhere there is a factory, power plant, natural gas/oil field that uses any sort of pressure/temperature/measuring equipment. (Also, 80% of loans gone after 2 years out of school)

Here's how I went through undergrad and graduate school with almost no debt. I went to a small private college where tuition was dirt cheap and graduated with a BA in English. I wanted to be a college professor or constitutional law attorney. I worked during the semester and worked during the winter and summer breaks. After graduation the professor / attorney option didn't work out and I got married and started my family making $32K / year. After working for about a year I proved to my employer that I was worth their investing in my education. They picked up 95% of my tuition / books for me to attend a well-known university in the area and earn my MBA in 4 years. In the meantime, I worked hard and proved myself and was promoted several times.

With my MBA in hand, I was able to go from making $45K - $50K at that employer to $70K at another company. Because the former company had paid for my tuition, I was obligated to repay a portion of it ... which my new company agreed to take care as part of my salary negotiations.

Fast forward 5+ years and several pay raises later, and at this point I am able to go back to school for another gradute degree and pay for it completely out of pocket with a family of six.

Moral of the story: Be willing to work hard, pray hard, and study hard. Don't wait for someone to give you a handout or an opportunity to succeed; create the opportunity to succeed yourself. Be creative. You can finance your education without taking out student loans. Also, in most cases, the name of the college / university on your diploma doesn't matter to your employer. You don't need to pay $50+K / year for an education that you can get for $10K / year. I work with graduates from Harvard, Wharton, Kellogg -- and they aren't any smarter or better educated than I am.

wow I never new that. Thanks Nancy C!

It's also a major scam in most instances. Under the act, most people will pay off an overwhelming majority of their loans. In many instances, all their loans. It also forces you to work in for the "public," which in a broader sense means getting some form of government employment or government subsidized employment. These jobs are few and far between during budget crunches, and are hard to find in any case for most graduates--not to mention your reduced earnings by working in such employment. Finally, the IRS considers any discharge of debt as a taxable event. Therefore, if you had 100k discharged in 2017, you now have 100K in income. Best of luck paying the taxes on that when it hits you. I suggest saving up for it. Oh they claim it will be fixed by then. Well, it's been five years and it hasn't happened yet. Be wary of this act. It isn't all its cracked up to be.

"Whatever remaining debt you have in federal loans is forgiven." And shifted to the taxpayers.

Actually, because you are in income-based repayment plan, you pay what you can, so if you don't make much, you aren't paying the overwhelming majority of the loan. I will still have to pay my private loans (which in hindsight I know I shouldn't have done). But my federal loans will be dropped after 10 years. The "public" jobs definition is "Public service jobs include, among other positions, emergency management, government (excluding time served as a member of Congress), military service, public safety and law enforcement (police and fire), public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations), public education, early childhood education (including licensed or regulated childcare, Head Start, and State-funded prekindergarten), social work in a public child or family service agency, public services for individuals with disabilities or the elderly, public interest legal services (including prosecutors, public defenders and legal advocacy on behalf of low-income communities at a nonprofit organization), public librarians, school librarians and other school-based services, and employees of tax exempt 501(c)(3) organizations. Full-time faculty at tribal colleges and universities, as well as faculty teaching in high-need subject areas and shortage areas (including nurse faculty, foreign language faculty, and part-time faculty at community colleges), also qualify."

Because I work at a Big Ten university (and as staff, not faculty), I qualify as working a "public" job. I talked with the federal loan people a couple times and was assured (because I asked several times to be sure) that my job did qualify me for the act.

However, I am aware of the tax implication of writing off the debt. And I have 10 years to save up for that. But it's still better than having all that debt hanging over my head. I would definitely do things differently knowing what I know now about student debt, but this is a way I can pay off what I can and not worry about how I'm going to save up for other things like retirement.

T.S 2002

Does the IRS consider scholarship money (ie: athletic scholarships) as income? I have not heard that if they do. My question is: what's the difference?

It depends on the scholarship type and what you are using it for. It can be potentially taxable. However, most people do not worry because they are in degree programs which are exempt if you are using the money to pay for tuition, books and other mandatory fees.

The income-contingent repayment plan is 20% or possibly less of your household income. It does include your spouse's income if you are married and file jointly. For my family, this amounted to a huge amount that was actually more than the standard repayment plan. The plan works well if you are single. If you are married, it works well if you both have huge debt or low incomes. But, if your combined household is near 100K, you are talking about 20K in student loan payments yearly. Under such a plan, in my instance, my loans will be paid off in less than 7 years even though I work in the "public" sector because my spouse's salary is really high (even though she wasn't around while I was accumulating this debt).

Finally, never count on a program that can be swept way with a vote and swipe of a pen.

My student loan was cancelled; will this result in taxable income?
In some cases, yes. Your student loan cancellation will not result in taxable income if you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation.

Are there other conditions I should know about to exclude the cancellation of student debt?
Yes, your student loan must have been made by:

(a) the federal government, or a state or local government or subdivision;

(b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or

(c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization.

There is nothing wrong with a 4 year school...the laws require 4 years or more for acct, docs,lawyers, teachers,engineers, etc....the issue is there are 1/3 of the schools where what they teach has no practical value/skills in the real world. People and business pay for skills or licensed people, NOT book readers. ITs fundamental of why there is so much debt and to make it worse a lot of HR departments have been brainwashed for 4 year degrees or don't promote, its a good ole network...

Rick-546746

well done!

Nah. People were still buying houses that they could not afford. Hence the mortgage meltdown and the housing market collapse.

It can be done... As a white kid, I went to a black university... Free ride minority scholarship. :)

It works both ways.

I agree on the scholarships and grants. I was surprised that the students didn't even make an effort to apply for these free money. I always kept getting approved because not enough was applying. It was small amounts...... 500 here...... 700 there..... but better than nothing.

Why? All it takes a simple search on google. Sometimes life doesn't give you information on a silver platter. You have to work for it, like a simple search.

What's next? Detailed story on how to apply for FAFSA?

That was your first mistake. Trusting a banker. Did he work at Bank of America?

Deborah, those EE degrees are sure worth it, That is what my degree is in, and yes, I also love my job.

Interesting. I have less debt (an attorney to boot), but a wife and two kids. It can be done and is being done by many of my friends. You suck it up and live your life. Things will be fine.

peteMT, I agree with going to a state school. But first, go to a community college, that has agreements with the State university, and perhaps another smaller state college. The community college here has at least two such agreements, plus the State U opend a nice campus here also.

Forget the loans for the time, try using grant money. Almost every grant has x amount of openings for people who apply. And the nice thing about the grant money, it is granted to you, it's not a loan.

And as to what end? I guess that is up to the individual. But be very smart on what degree you are going for. Is their a demand for that degree in today's economy? Basket weaving isn't in demand.

I live on a resort island, and this year, the spring breakers "discovered" us. While they seem to be good kids, they all have very nice cars and electronic toys. I wonder how many borrowed money with student loans to buy these things?

I never took "spring break" when I was in college. I worked, and the idea of spending over a thousand dollars to drive to Florida and get drunk was just not in the cards.

A lot of kids in college live a better lifestyle than they will when they graduate - and a lot of it is funded by student loans.

There are cheaper ways to do college, and when kids seek them out, colleges will have to compete on prices. So long as student loan "funny money" props up the deal, colleges will continue to raise tuition by 2-3 times the rate of inflation, as they have for the last two decades.

jmikesic, glad to hear it. And thank you for serving.

Is that even a story? Some guy claims to be a "new black panther" and offers a reward? They probably don't even have the money to pay it.....

A lot of people go on TeeVee can claim to be something they are not. Four guys in costume do not a movement make....

My neighbor's kid did this, after they realized they were too "rich" to get any assistance at Brown, and too poor to afford the full tuition.

It worked out well for her. Once you graduate, people look at where the degree came from, not where you studied freshman Chem.

And 5 years out of school, no one really cares much about your college experience, really - if you have job experience.

Good for you!!!!!! I'm retired and I remember when people always paid their bills regardless of what they were. Now many of us have to pay for them.

I guess the point is, you can go to college without taking on tons of debt, if you are willing to work, and smart about it.

Summer school was a great. I worked nights at United Parcel and took about 2 classes during the day. Having more time to concentrate on the coursework, my grades were high.

During the regular school year, it was appalling to see the "full time" students and how they spent more time posturing and working the social angle of college - making sure to wear the "right" clothes and attend the "right" fraternity parties.

For many kids, College is an extension of High School. Childhood now extends to age 30. And people wonder why no one is hiring these kids?

Employment numbers are up, today, but the group that is benefiting from this the most are older workers.

Not hard to figure out why.

To me it seems like their has been a major push from both kid's parents and from the schools to get kids into college before they even know what they want to do. It is stupid. Many of my peers tell me that they are parents are making them go to these fancy four year universities and they have no idea what they want to do, nor were they even successful in the easy classes at high school. I hear story after story about kid's parents shelling out 50k just for them to flunk out.

I agree. While the young associates at the "sweatshop" law firm are working until 8:00 every night, the plumbers are on the golf course at 3:30. And guess who makes more? The plumber.

Learning a trade is not a bad thing - and it opens the door to the opportunity to run your own business, down the road.

Sadly, we still use this outdated model of teaching kids very impractical things, without telling them how to even balance a checkbook.

While I was taking AP Calculus in High School, the "dumb kids" were taking "business math" and learned how to keep the books on a simple business.

When I opened my own law practice, one of the first things I had to learn was basic accounting - they don't teach that to the "smart kids" in high school, Engineers in college, or law students in law school.