Getting started nowadays?

[LivingAlmostLarge]

I keep reading about these atrocious student loans. How people are trying to escape to the jungle. This guy was a philosophy major who owed only $20k Or a teacher who owed once in 2004 $35k but he couldn't pay so he stopped and the interest makes it now $100k+. I'm horrified.

But there are two parts. One a teacher couldn't make ends meet and pay off $35k? Even on a 30 year payment that's a $100/month. Assuming a 15 yeear payment that's a little over $200-300/month. I'm shocked that it was that difficult to pay.

I wonder if people are struggling to get started now because they have very high expectations upon starting out? That it's shocking they can't eat out, travel, etc. That perhaps the lifestyle they expected can't be had on an entry level job?

Or is it really that salaries are so low that owing even $100 is too much? Or is it that we now owe every month on EVERYTHING? That the teacher has the student loan, car payment, CC debt, medical bills just starting out?

I can see how nowadays where you are born and what your parents do makes such a big difference. That some people on this board are able (cheers) to fund college 100%. So their kids will walk out debt free. These same people likely talked to their kids so these same kids won't have CC debt or medical bills. Also these same kids might even be gifted a car so they are starting out with a car, no debt, and an education.

So you are starting from a position of power. I know that these same people on the board were like myself and when we started out we had some student loans, some car loans, maybe even medical and CC debt. But somehow we made it.

How did we manage? How did all of your manage to get ahead? Was it really hard to pay off your starting debt and get going? Do you think it's because salaries are lower? Or is it higher lifestyle expectations?

[Singuy]

I received many freebees from my parents so I'll attribute a lot of our success to that. My wife came from 176k worth of student loans but she didn't have to pay for rent and had me pushing her to pay it off so lets say she got off easy too.

The glaring problem is that income. Nothing wrong with getting a low paying jobs, but there's something wrong with people's attitude in attacking the short comings of a low paying job. This means people shouldn't pay just to have the privilege to have this low paying job. If you must pay, then you should try to mitigate the loans as much as possible through part time jobs, going to community college, and staying at home.

Then you need to also be prepared to stay at home some more after you start this job, and use as much of that paycheck to pay off the student loans. Too many people wants to get a new car, a new house, get pregnant, etc etc after graduation. How about wait a year or two and get your sh#t together first? No? Don't want to do that? Then how about not go to school and have a low paying job or go to school and get a high paying job?

[Thrif-t]

Yep, people have to high expectations and just aren't smart when it comes to money.

I'll use a friend of my DD. She went away to school on loans. Why? she could've lived at home and commuted. Now she is in her senior year and student teaching, needs a car.

Moved back home, now she's commuting her senior year, bought a brand new '18 car. I'm guess she has the longest loan on it there is. Ridicules! So not only will she have student loans, she'll have a car payment for the next 7 years too! I'm guess her student loans to be in the 20k range, but still.

I think it's the parents fault, but some people will tell me the kids are 18 and old enough to make their own decisions. Phooey I say, NO THEY ARE NOT!! This girl could've done like my kid, lived at home, bought a reliable used car and commuted from the get go. There wasn't any reason for her to go away. Especially when the parents had 0 funds to help contribute besides loans.

People are just dumb, I'm sorry

[Jluke]

It’s probably all relative (salary vs expenses) but depending on how far back you are going makes a difference.

Cable, cell phone, internet.

Car prices.

Gas prices

insurance.

Home prices.

People used to be able to work and pay their way through college. Come out with no debt.

if I could afford to work and pay for school I probably wouldn’t need to be in school (30k plus per year tuition, add in living expenses like rent, food, gas, etc).

It’s difficult to “launch”. Not impossible.

[disneysteve]

I don't think it's too hard to figure out the problem. It's a combination of expecting too much, over-borrowing, and under-working. And the fault doesn't just lie with the students. It also lies with a generation of parents who simply don't know how to say NO to their precious children.

I work with a lot of young people, and by young I mean 20's and fairly recently out of school. Every single one of them drives a much newer and nicer car than me even though I earn about 8 times more than them. One woman is frequently traveling around going to music festivals. Another has spent a few thousand dollars this year on laser hair removal. She is currently pregnant and has been looking at baby items including a $1,200 stroller. Another one is constantly talking about her latest designer handbag purchase and other high-priced items she's gotten. I guarantee not a single one of them can afford the stuff they are buying. They're all doing it with debt.

Yes, my daughter had an advantage. She had parents who have a good income but are also very smart with their money and saved for her education. She only borrowed $15,000. However, she graduated in May and only has about $1,800 remaining because she has made payments all along.

Was I different? Sort of. I graduated in 1990 owing $102,000. That was quite a lot of money back then. So I lived very frugally for quite a long time after graduating and was able to repay it in 12 years. I have never adopted the "doctor" lifestyle that so many of my peers did straight out of medical school. As a result, many of them were still in debt after 20 or even 25 years.

People just don't know how - or simply don't want - to sacrifice anything. They want the new car, cable TV, Netflix, an iPhone X, trips to Play del Carmen, seeing their favorite band a few times a year, a bar stocked with premium brands, groceries from Whole Foods, a Coach handbag for every outfit, etc. They see debt as a necessity to "afford" today's lifestyle.

[Smallsteps]

I have a hard time with this subject my son has quite a bit of debt but refused my suggestions to pay while in school even though he could have made a big dent if he had listened to me. Also so many people I know pay the minimum payment instead of throwing extra at it and constantly whine about how long it will take paying it off.
I bite my tongue instead of asking why they can't do basic math but seem to mention the level of their DEGREE in every conversation.
I too work with younger coworkers and some older that are simply incompetent to handle their finances. I am truly astonished sometimes and a little sad when I see this.
Of course these are simple glimpse of situations but if I had $1.00 for every co-worker whose complained about spouse/ life partner not carrying their weight or people who were on verge of shutoff of services but had the newest gadget or attended every concert or event in town I would NEVER have to work. Yes it is that prevalent.

A co-worker told me that she had a surprise water bill of $140( she was not receiving notices so just did not bother to ask about it until the shut off notice).
She was totally panicked said she could not cover that hoped between her and her 2 roommates they could pay that. I was confused as we literally just got paid that day could not imagine not being able to come up with that amount. The VERY next week she tells me she Spent $250 for her Halloween party.
So she could not pay $140 to keep her water on but was more then ok to pay $250 for snacks and drinks for a party.
The Hilarious part is she told me she is in control of all the bills at her house because SHE is the smartest one of the roommates to mange the bills. I see big trouble in the future for this person and I cringe to think about those who look to her as the responsible one.

[disneysteve]

Everything you describe, Smallsteps, mirrors what I see and hear on a daily basis, and not just from young people.

[Smallsteps]

It really makes me wonder what is going through some peoples minds. Yes, school is very expensive but quite frankly I think student loans are too easy to get.

When I graduated, my school had a complete online class to go over and over again the importance of paying your loans and how you could not be discharged like many other debts etc.
ALL I could think of is WHY this information was NOT gone over before the loans were approved.
I think it would make many rethink the amount of loans. Instead they tell you that you do not need to pay until 6 months after graduation and constantly push the idea that a degree will guarantee a good income. This is NOT always true.

Many loans that are building in interest or going into default are those loans given to people who give up before graduating or ( I have met more then a few) people who chased a degree / career based on the reported/ suggested income potential instead of a persons aptitude or skills. Both groups are often very ANGRY that they have to pay when school really did work out for them.

[disneysteve]

I think student loans are too easy to get.

WHY this information was NOT gone over before the loans were approved.

I totally agree that there isn't enough education on the dangers (and pros) of student loans in advance. Exit counseling is great but it's too late then. High school kids and their parents need mandatory debt education. They need to have it drilled into their heads that cost needs to be a deciding factor in college choice.

I hate how colleges send potential students a financial aid package but a big chunk of the "aid" is student loans. But it brings the balance down to zero so everybody thinks they're in good shape and can afford to attend. They need those aid packages to leave out loans and show, "here's what you're going to get and here's how much you're still going to have to come up with somehow, most likely from going deep into debt for the next decade or two."

[Smallsteps]

[QUOTE=LivingAlmostLarge;n699029

How did we manage? How did all of your manage to get ahead? Was it really hard to pay off your starting debt and get going? Do you think it's because salaries are lower? Or is it higher lifestyle expectations?[/QUOTE]

It is all about lifestyle in my opinion. No one wants to be frugal and save or pay off loans. We also have had politicians saying things like free, free ,free or trying to forgive so many loans. Some people, I know are doing other silly things like paying loans off with credit cards so they can discharge the debt that way.
Many are very ill prepared for adult life, not understanding much if at all about finance.

In one link on this thread the article said one person was not paying but waiting for this proposed loan forgiveness and another example knew her choice of college was part of the problem.
I do not know how these people are staying in foreign countries indefinitely ? I thought travel / work visas had time limits etc?

I look around at those Starting out and see the same thing over and over again...…. Complete Unwillingness to change any lifestyle choice and place blame on society or bad economy or what ever problem of the day is.
Articles on this subject often do not tell the whole story and better understanding of student loans should be required before loans are distributed.
I wrote before when I graduated we went through a complete informative online program that REQUIRED passing a TEST to see that you UNDERSTOOD how this worked and how student loans cannot be discharged like other debt etc.
.I truly feel that the program if given at the front end would probably have discouraged some students to wait or find cheaper alternatives for education. the colleges do not want students to change their mind.

[riverwed070707]

Think everyone else already conveyed similar thoughts as I had, but I'd say primarily lack of financial education and no grasp of delayed gratification. The whole keeping up with the Jones' mentality. I'm 32. My family were not good financial influences and I learned much of what I know by striving to not be like them. My family was the type to go all out for Christmas and pay it off with an expected bonus in the spring... which sometimes did and sometimes did not come. My mom drives a vehicle with a value equal to her annual income but she cannot afford to buy a house in a COL area where a 3 bedroom house costs $100k or less. I watch coworkers build brand new houses or upgrade their $250k 15 year old homes for newer, bigger $450k houses because they've "outgrown" 2000 sq ft. Student loans or no student loans, people in my generation and the ones following it are going into adulthood expecting to have the things their parents have worked their whole lives towards, or better than what their parents had. Its soooo depressing. I'll keep my 11 year old car and 1,100 sq ft house that will be paid off in 10 years and keep socking away my extra income for early retirement and affordable travel adventures.

[Thrif-t]

Good for you riverwed, you got it! You'll have a stress free life because of it.

[Keshet]

I'm thankful I found a field, nursing, that I enjoy and that has provided me with a decent and steady income. As far as student debt, I never had any. My parents paid for my tuition for an LPN program ($400!!). After I started working at the hospital they offered to send me to school. This was in 1980 when the nursing shortage was very bad in the whole US. I have never been unemployed. I can't imagine what it's like for young people today.

[amastewa93]

Speaking from a different perspective here...

I am also baffled at people's inability to make these student loan payments, etc. I am 25 years old. I have worked with student loan people since I left college to work on paying them down/off. If there was a month I couldn't swing a payment because something crazy happened, I called and communicated with them and got it figured out. 9/10 people I know are terrified of actually communicating with someone, especially when it comes to money.

I also think people are, in many cases, just surprised to find out how the real world works. I had many friends who were shoved into real life real quick. While my upbringing was less-than-perfect in many ways, I was prepared for the more harsh realities of life. Some of the folks I graduated with are making $3,000-$4,000 a month, living at home with their parents, and are still neglecting to pay their student loans! Whereas I've been out and on my own since I was 18 (and my mom actually lived with me for a while in college). Most kids wouldn't even think about that ever being a possibility.

My "starting" wage out of college was $15 an hour 25 hours per week. I was scraping by and renting a single room. My (now ex) boyfriend at the time landed us homeless and we moved into my dad's where I still paid $500/month rent. I soon landed a job making $2,500 per month (a modest increase) and continued to work my way up.

Lastly, none of them are thinking forward with their finances. And I can say that with some degree of certainty. Kids in college are talking about how much they are going to make salary-wise, what they are going to do with that money... but none of that includes becoming debt-free, investing, or retiring. In many cases, they're living on credit cards through college and continue to do the same after college. And, sadly, 9/10 their parents bail them out when they need it.

Largely, none of them are willing to be uncomfortable right now to ensure comfort later in life. They don't appreciate delayed gratification. And that is sad.

[LivingAlmostLarge]

I can see how KUWJ is a big problem. But wasn't that always a problem for most people of previous generations?