Sunday, August 24, 2008

Student Loans

An article in the NYTimes about student loan debt.

I didn't really like the tone, it seemed that those they interviewed were trying to get out of paying and it seemed to be focused on bancruptcy.

I have oodles of student loans, from my masters degree. But, I am proud to say that I paid off my undergraduate loans before allowing myself to even THINK about a graduate degree. I also had consumer debt from 3 years of free-lancing (following a layoff) and was living at 50% of the wage I made prior to that change.

The masters was my way out of low-wages (I was in the arts as a crafts person). As an arts administrator, I now earn 70% more than I did at the job I was laid off from, 300% more than I did as a free-lancer.
As a side note, how awful is it that the further you get from having a specific skill, one that ties you more deeply to the mission of an arts and cultural institution, the higher your salary goes?

Can you build museum quality mounts and handle priceless artifacts? Here's your $11 an hour.
Can you build an excel spreadsheet and schedule meetings? Here's $35,000 plus benefits.

But I digress.

I finally sought help to get a grip on the consumer debt - but they could not negotiate with Sallie Mae in the same way they could with my other lenders. If fact, they said they couldn't even try.
At 3% and 4%, consolidating my loans didn't make sense, as it would at least double my interest.
Other than consolidating, my options with Sallie Mae are forebearance or paying in full.
If you pay an amount smaller than the monthly bill, they send you into default.

There's no middle option for those who want to pay, but require a period to time to pay something between nothing and everything.

And I think that is a huge mistake.

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