Debt.. Jobs.. Education Options

[stephen_lee]

I'm now 18, as of February 2nd, and I see my mother, sister, brother, and even grandparents in debt. I'm truly afraid of owing any money aside from buying a house. As of now I probably won't even buy a car unless I have the cash for it. Once in the last two years have I ever been in the negative. The only reason that happened was because, when i worked at Little Caesars, my pay check had bounced, so they took around $490 out of my account w/o any notice throwing me -$19 and then the $31 overdraft fee. I talked to my employer though, and got $670 back. A nice gain of $149 after the fees. But in all honestly it was.. quite bone chilling seeing that "-" on my account. Anyway, i now work at AutoZone, with a chance to work building engines for an oil drilling company starting at $12/hour while average wage is $35/hour. But then again, I'm really good w/ computers and am already a certified tech. So I think I'll be fine as I have something to fal back on no matter which way I choose to go. I know one will be a great choice in the long run, and I will have great Job security. The other, though, will start paying off much quicker, but not as much in the end, with less security. But the former requiring college and therefore debt since I don't have the cash to pay for it as of now. *sarcasm* I love decisions...

[GriffGirl]

The statement above about student loans being the devil is simply untrue. Living beyond your means - i.e., credit cards, now those are the devil. But an investment at a low interest rate to get an education is not only a wise investment and money well spent, your loan payments are tax deductible.

FAFSA is the first way to go (Federal Aid) - unfortunately (or fortunately depending on your situation) it will be ENTIRELY contingent on your parent's income until you are 23. The government doesn't care if you work or support yourself. You can appeal decisions if you are denied aid but are independent if you file your own taxes as head of household. This is how I was able to make it through college on the tail of the first Bush administration, when getting aid was MUCH more difficult. Clinton revamped everything, and made it easier. It's still that way now.

Now if your parents don't make much, if you have younger siblings, or live with a single parent who claimed you as a dependent on their 2007 taxes, your odds of getting Federal aid increase dramatically. Federal aid does not always equal loans. It starts out with the Pell Grant, I think there are a few other little grants too, which are small but if you go to a community college can easily pay for a year of it, including books and supplies. Next you're looking at the Stafford Loan, which is a Federally guaranteed (the Fed guarantee the loan to the actual lender, typically Sallie Mae or whatever mega financial corporation it is these days) and given to you at a low, typically variable rate. I believe it's around 4%. Your payments are not due until 6 months after graduation or withdrawal from college, whichever comes first. You can go all the way to your Doctorate without having to make payments, just so long as you're in school. And if you're unemployed and can't make the payments after that 6 months, you will be eligible for NUMEROUS deferments and even forbearance if it goes that far (that takes a few years).

You have options, and honestly, the investment in your own future is probably the best investment you can ever make in yourself. Go talk to a financial aid counselor at a school you're interested in. There are all kinds of scholarships available, grants, etc. in addition to FAFSA. A financial aid counselor can advise you of your best options.

[Rayme]

Eh tax deductable? I got barely 300$ out of the 1200$ I paied in INTEREST last year, that's not very helpful.
However you want to put it, student loans are bad, the interests rate are higher than a mortgage for the same amount of time.
The banks/government are banking big time on giving out huge loans to kids that don't know for sure what they want to do with their study. The interest rates should be extremely low.

I agree that it should be seen as an investment in your future, but the truth is when people are 17, they often make bad choice because they are just young, it happened to me and to, sadly, the majority of my friends. I have 4 years of college(3 different courses) and I'm getting paied under 15 bucks an hour. Bad decisions? Maybe, but its bound to happen to the majority of people to take more than 1 different field of study and just accumulate student debts. And my case is not very different than alot of people. Not everybody gets 20$+/hours jobs when they are out of college.

Maybe I should re-phrase, they are a often necessary evil.

The statement above about student loans being the devil is simply untrue. Living beyond your means - i.e., credit cards, now those are the devil. But an investment at a low interest rate to get an education is not only a wise investment and money well spent, your loan payments are tax deductible.

FAFSA is the first way to go (Federal Aid) - unfortunately (or fortunately depending on your situation) it will be ENTIRELY contingent on your parent's income until you are 23. The government doesn't care if you work or support yourself. You can appeal decisions if you are denied aid but are independent if you file your own taxes as head of household. This is how I was able to make it through college on the tail of the first Bush administration, when getting aid was MUCH more difficult. Clinton revamped everything, and made it easier. It's still that way now.

Now if your parents don't make much, if you have younger siblings, or live with a single parent who claimed you as a dependent on their 2007 taxes, your odds of getting Federal aid increase dramatically. Federal aid does not always equal loans. It starts out with the Pell Grant, I think there are a few other little grants too, which are small but if you go to a community college can easily pay for a year of it, including books and supplies. Next you're looking at the Stafford Loan, which is a Federally guaranteed (the Fed guarantee the loan to the actual lender, typically Sallie Mae or whatever mega financial corporation it is these days) and given to you at a low, typically variable rate. I believe it's around 4%. Your payments are not due until 6 months after graduation or withdrawal from college, whichever comes first. You can go all the way to your Doctorate without having to make payments, just so long as you're in school. And if you're unemployed and can't make the payments after that 6 months, you will be eligible for NUMEROUS deferments and even forbearance if it goes that far (that takes a few years).

You have options, and honestly, the investment in your own future is probably the best investment you can ever make in yourself. Go talk to a financial aid counselor at a school you're interested in. There are all kinds of scholarships available, grants, etc. in addition to FAFSA. A financial aid counselor can advise you of your best options.

This post has been edited by Rayme: Mar 17, 2008 - 2:03 PM