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How Does the Cost of College and Debt Affect Students and Alums?
Recently, President Obama toured campuses around the country to promote his latest economic priority for the middle class: "We've got a crisis in terms of college affordability and student debt," Obama told a crowd of students at the State University of New York at Buffalo. His solution? A new rating system that will incentivize affordability by tying student aid grants to a set of standards that determine the value of an education. The better the value a school provides, in other words, the more federal money it can receive. Obama also proposed capping loan payments at 10 percent of the income of recent graduates. So how much of a crisis is the cost of education to current students and recent graduates? We asked it.
The Latest American "Crisis"?
Recently, President Obama toured campuses around the country to promote his latest economic priority for the middle class: "We've got a crisis in terms of college affordability and student debt," Obama told a crowd of students at the State University of New York at Buffalo. His solution? A new rating system that will incentivize affordability by tying student aid grants to a set of standards that determine the value of an education. The better the value a school provides, in other words, the more federal money it can receive. Obama also proposed capping loan payments at 10 percent of the income of recent graduates. So how much of a crisis is the cost of education to current students and recent graduates? We asked it.
Natalie, Recent Graduate
I took out FAFSA loans all four years of college… I didn't really think about them until they made me do an exit interview at the end of school where they break down how much you're going to be paying every month.
I'm going to paying $264 a month for the next 10 years to Sallie Mae and the Federal government. At the beginning, my parents and I thought it would be $100 a month for 5 years… so yeah, it was pretty shocking.
I felt a lot of pressure to get a job right away, and I was lucky that I did find one before my grace period was over.
John, Graduate Student
It's absolutely amazing how easy it is to get money if you're a [graduate] student. It's crazy! They'll just give you money... at a fairly high interest rate. Now I understand what it costs to live, and how it would affect me from month to month. But if I was 18 and someone offered me $50,000? I don't think I would get it. At that point your parents have been managing everything for you your entire life.
Justin and Francesco, College Students
Justin: I'll probably have to take out loans for my final two years. I'll have to worry about how I'm going to pay off my debt. It'll put a little more pressure on me to get a higher paying job. It reminds me that I'm not just here for free; I'm investing in something and I have to make sure I'm making my time worth it.
Francesco: Education in Italy is almost completely free, and the public schools are the best schools. We have more humanities and Classics studies. Then again, there's a lot of talk here about how horrible Italy's situation is and how we're being swallowed by debt so... still both the education and healthcare systems are free for everyone, no one gets turned down.
Britney, Graduated Five Years Ago
I was pretty fortunate. I got a lot of outside scholarships so I only had to take out $8,000 in loans. I'm originally from Michigan. I have friends who ended up back at home because they couldn't afford school, or who weren't able to register for class because they had an unpaid balance. I know people who took out tens of thousands of dollars.
Felix, College Student
I'm from Hong Kong. There it only costs about 1,000 or 2,000 American dollars a year to go to college, but they earn less so it's just as much of a burden. It's a lot of pain for a lot of people. I've heard in the news of parents committing suicide because their son got into a really good college and they couldn't pay for it.
