Another idea for student loan debt: Make it go away
As I read this article, my heart breaks for all the people out there that took out student loans and have found themselves in a situation where they are unable to see their way out of the mountain of debt. I totally sympathize because I am one of them. I went to the University of California (UCSB) for 4 years. My parents were unable to help me with my tuition, so I (like most) resorted to taking out student loans every year. At the end of 4 years I had financed about $40k. While I was taking out these loans (being 18 years old) I was under the impression that once I graduated from college, a well paying job would be waiting for me and I would easily pay these debts off. I was blessed to find a job that has enabled me to do just that (still working on it). But for a lot of students especially those graduating during the Great Recession, that promise of success is hard fought. While I totally sympathize with their plight, I totally disagree with the idea that these loans should just be "forgiven" across the board.
I am totally in support of programs that offer graduates the opportunity to "work" or "service" these loans off, most often through community/world service, military service, or by contributing to the communities less served (for instance teaching in an under-served area), but to simply be allowed to walk away from your responsibility is not the right way to deal with it. While Mr. Applebaum (advocate in the featured story) has a right to advocate loan forgiveness, I believe its irresponsible for him to suggest that the American people as a whole should shoulder the liability of all the graduates in this country (a lot of these loans are Federally insured). We live in a free society, were we have choices, there are ways (although not popular) to work your way through school or minimize your loans. I know from experience that I could have done a better job in managing my costs when I was in school, but I chose not to. Knowing that we (those with student loans) can't turn back the hands of time, what are we to do?
1. Get on a plan...that is the B-WORD (BUDGET).
There are options (especially for Federally insured loans) to lower your monthly payment to a reasonable percentage of your discretionary income (10%) and start paying it down like you would a car loan or a credit card. Just focus and devote your energy to tackling that debt until it is gone. If you need help with that seek out a Personal Finance Coach or Counselor that can help you get organized.
2. Increase your income.
Put the Student Loans on hardship deferral and spend that time formulating a game plan to get more money coming in. Perhaps you don't care for the subject you studied in school, but figure out what you can do NOW to maximize your income given the education you do have, focus intently, and move on (to your dream job).
3. Give Back.
Educate those high school students you know that are preparing for college on your experience with student loans and try to help them understand there is a better way to get through school without or with as little debt as possible. I would rather young America take a little longer getting out of school (because they have to pay their way through), then spend the next 10 years of their lives AFTER graduation shackled to the chains of student loan debt.
How many of you are still struggling with student loans?
If you have paid your loans off, how did you do it?