In a previous post, I explored the speculative reasons why students despise student loans, and what they can do to avoid the unfortunate pitfalls of some indebted grads (no job! depression! My life fell apart!). Countless advice websites aside, the real student loan experiences of 32 people between the ages of 21 and 30, were calculated in a Google Forms survey over the course of two weeks.
Of the students surveyed, 72% said that they used student loans to pay for at least part of their college tuition, and 34% of respondents will have to, or are paying off more than $25,000 of debt.
Why it sucks, in reality:
1) Hindsight is always 20/20– A large portion of the respondents referred to the fact that they felt they were too young to make financial decisions at age 18 that would seriously impact themselves decades from the start of college. 29 percent of respondents even went to far to say that they regret going to their college because of their debt, or are unsure if they are happy with their decision.
“I wish that someone had explained loans and debt more clearly to me when I was 18 because sometimes I regret taking so much loan money,” said Lindsay Armstrong, a graduate of College of the Holy Cross and current grad student. “Then again, I got a great education and someone probably did explain, but I was 18, so I was just like….whatever, it will all work out.”
2) Sallie Mae’s website is confusing– Three out of the 32 respondents specifically referred to Sallie Mae’s confusing and contradictory website. One female respondent pointed out that if you ever have insufficient funds in your bank account, Sallie Mae will keep trying to take money out, and you can rack up bank fees.
3) What is up with Sallie Mae changing policy? Speaking of Sallie Mae, many post-grads feel that in general, the company’s policies are always shifting and far too confusing.
One female respondent, a 2006 graduate from Hofstra University said “My loans kept getting bought by different companies, I’m not too sure why that was happening but Sallie Mae did not really explain to me the change of interest rates nor the best way to go about paying them back since they are in separate accounts.”
She also said that she wants to get a financial advisor, but cannot because of, guess what? her loans.
4) Dreading the payments each month– Many respondents said that even with educating yourself about loan options, it is still daunting to see that bill come in every month. Approximately 63 percent of respondents got a job immediately after college, and of that 63 percent, 34 percent got a job after college at least partially for clearing their debt and for financial reasons.
Even with a job, though, payments can be difficult. Danielle Kuhn, a 2010 graduate from The College of New Jersey said that she is living at home working at a job that she doesn’t enjoy and is overqualified for, just to pay off her loans.
Justin Mitchell,a 2002 graduate from the University of Northern Colorado, pointed out that, “when people are coming out of school with crippling levels of loan debt, they are left with very few options, and are facing huge debts before they’ve even started their lives.”
5) Not knowing my options- Although Justin said that he wishes that there were other options, this brings up the final complaint from post-grads. are there any options besides Sallie Mae? According to askstudentloans.com, just because Sallie Mae is the the most popular student loan distributor, does not mean it is the only one. There are also Stafford and Plus loans, and plenty of scholarships for every type of student out there.
Even with these complaints, however, students don’t seem to be too worried. The majority-44 percent never or rarely think about their student loan debt. An as for optimism- 41 percent of respondents think that it will take them less than five years to pay off their student loans.
The effects of paying off student loans in the real world can be scary, daunting, and burn multiple holes in your bank accounts. The top bits of advice that respondents gave to students entering college and college students? Make sure to listen to your financial advisor and parents, when you take loans out, and when you begin paying them back.
Tom DiChristopher, SUNY Albany Class of 2005, said that if he could do it again, he would have put college off for a year, and thought twice about deferring his loans immediately after graduation.
“I think the biggest misconception post-grads have is that deferment is a solution,” said DiChristopher. “A six-month reprieve after graduation is fine, but it’s important to start paying as much as you can as soon as possible.”