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Student Loan Sharks

I’m no financial adviser, but I can tell you student loans stink.  Having worked in the higher education setting for awhile, I can also tell you that the quality of education is not rising with the cost.  In fact, the cost and quality are moving in vastly different directions.  With more education being privatized and publicly traded, the sales side of higher learning can catch people off-guard.  I have known more than a few people who signed up for “degree programs” that they did not need, were not accredited, or were completely beyond their capabilities;  they all took out mega loans to pay for it.

Education is wonderful.  If you choose to go back to school, enjoy it.  Swim in it.  Make sure you know why you are doing it and are ready for it.  There are some nefarious educational programs around that hire sales people to trick people into signing up for really, really expensive programs.
SALES PEOPLE.  WITH QUOTAS!  Their job is to make you dream of the life you could have, the salary you could bring in, and the self-esteem that will come with it all.  These same people are OK with taking your money for a semester or two even if you fail out.  Hey!  They got their money.  Too bad for you.

Some people may be thinking, “It’s just a student loan.  No big deal.”  This is not as true as it might have been in the past.  After all, the idea is that you will have a degree and a high paying job when you graduate–not that you will have a huge debt, no degree, and no job.  A recent article states that 43% of 25-year-olds have student debt. Student loan debt has risen to 1.1 TRILLION in the past ten years!!!  Let me break it to you folks, the salaries have not risen to match…


Colleen Oakley’s article , says that “the burden of student debt could stilt consumer spending by twentysomethings, as well as further hamper the recovery of the housing market and economy.”  YIKES BIKES!  The article then goes on to highlight three professionals, their amount of debt, their salary, their re-payment plan.  LearnVest Planning Services CFP® Katie Brewer measures each of the plans.

In all three cases, the students are professionals with high(er) paying jobs: dentist, lawyer, business executive.  The article does not address professionals with lower paying jobs, who also need  degrees, such as:  teachers, social workers, marriage and family therapists.  I am curious what a plan would look like for these people.  *Also, worth noting, is that the attorney makes $55,000—not the quite the salary most people think.  Certainly there is a range in any field, but I want to give a shout-out to all the good attorneys out there that work really hard and are not rollin’ in a Benz.*

If you are feeling hampered by the student-loan-monkey on your back, give this article a look.  Brewer gives some sound advice and recommends a loan calculator to help you figure out how much you should/can afford to pay each month.

If you are thinking of going back to school, please visit the Council for Higher Education Accreditation (CHEA) page.  Here you will find a data base of schools, their accreditation, and several links to accrediting agencies.  All I ask is that you note whether the program you are considering is regionally accredited or not, and make your decision with full disclosure.  A regional accreditation means you can transfer (in most cases) your credits to another university (a public state university) for college degree credits.  This is important if you want to advance your degree in the future.

The Fair Trade Commission also puts out this pdf for employers, entitled Avoid Fake-Degree Burn By Researching Academic Credentials.  This article is designed to help employers avoid getting burned, but contains useful information for degree-seekers too.

P.S.  I couldn’t afford the diploma frame they were selling at graduation.  Mine is in a too-big Wal-Mart frame to this day!

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