I didn’t go back to school to finish my undergraduate degree until I was in my 50s. I had been taking classes here and there at whatever university or community college was close by, but all the credits I had amassed were unorganized into any kind of a degree program. In 2006, I decided to finally do the deed, took the necessary classes to fill in the blanks for a degree in English Literature and Writing, and graduated in 2007.
That was so much fun that I decided to go to graduate school.
I’m an adult, I have a husband and a home, the children are grown, and my life is stable. I didn’t need any help with food or housing, but the $1200/term tuition was not in our budget. So I applied for financial aid. $3600/year was all I needed, for three years.
The first check I got was for $6,000. (Remember, I applied only for $1200.) Well, we are not wealthy, and we had some debt, and I held that check in my hand for a long time, thinking how good it would look in my bank account before I took it back to the financial aid office and returned it, asking them to please only give me the $1200 I needed for tuition. They did as I asked.
Next term: Check came for $6,000. This time when I returned the check, the person at the desk said, “Oh yeah, right, I remember you now.” Hmmm… So 2/3 the way through my first year, I had borrowed $2400 but it could easily (too easily) have been $12,000.
Fast forward three years and graduation! Yippee! My student loan repayment was to begin 6 months after graduation, presumably to give me time to find a job. I already had an income, so I checked into the monthly payment.
A few surprises. Perhaps I should have checked into this a little more before I enrolled in grad school. Interest rate was at 6%. Twice my mortgage interest rate. And I had not one student loan, I had three, one for each year. Each was $3600. I had three payments every month. This was unexpected. And they could not be consolidated. (Why not?)
Regardless, I am an old pro at resolving debt, so I paid it off using the “snowball method.” I made minimum payments on two every month and more than minimum on the third. When the third one was paid off, I made double payments on one and minimum payments on the other until the second was paid off, and then the third loan was paid off quickly. It worked, but it was a pain, as all debt is, and the interest just kept on keeping on.
It took a few years to pay off that approximately $11,000 of student debt. And I was happy indeed when I made the final payment.
But the point is that my student loan burden could EASILY have been $54,000, had I banked those $6K checks every term instead of returning them and taking out only what I needed to be comfortable. Had I been young and more easily influenced by what might have seemed like a HUGE windfall of cash (party money!), everything might have been different.
This, and the 6% interest, is what makes this a predatory system. It needs to be fixed.
Our country is better when we have an educated populace.
In my view, the purpose of government is to help the people. One way we can help the people is to make public colleges free, and provide no-interest loans for those who need to study elsewhere.
One Writer's World 
Exactly. I started university at 23 during the Regan era. Student loans were critical to my ability to go to school at all. When I started, the loans were really low interest loans. Pell Grants were grants and not loans. Interest didn’t begin until I was out of school for six months, and all loans were automatically consolidated. There were relief programs available to help during hard times, and all of that could be traced back to “higher education” being defined by Federal Economists as “an investment in the future of the nation.” Regan brought in new economists and quite literally had them redefine higher education as “a luxury item.” (Note: He did the same thing in California, where residents could go to college almost free prior to his governorship) That, combined with changes made to allow private management and changes made to the consumer-protection usury laws that had required payment include interest and principle, created an open field for predatory lending. Minimum payments could suddenly be lower than the interest and allowed for the addition of interest to the principle, which then accrued interest, and the relief programs disappeared. My first job during the .com boom let me pay off my loans, but if I had tried to start college the year I got out of college, I might well still be paying on those loans. I certainly would have still been paying on them the year I bought my first house, which means I could not have been able to afford the mortgage on that house.
“Greed is good.”
If they only loaned you $1200 each time, how did they justify inflating that to $3600? That seems like it should be illegal.
It was $1200 per term, three terms per year.
Ah! That makes sense. I accrued a similar amount at grad school, 7% interest. Used a lower interest mortgage refi to eventually pay it off, and then eventually paid that off by selling the house. All told, a 25-year+ process.
Criminal.