The dreaded student loan crisis of today!

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To achieve happiness, the dreaded finances have to be addressed. Sure, you can ignore some of the mounting debt collectors lurking around your door. Some will even go away. Though, things like Student loans will NEVER leave. It has long since been known student loans are out of control. Why would they not be? You are 18 years old, no true understanding of the rest of your life, and you sign limitless loans to pay for things like meals, living expenses, and college.

Is not until you are in the “real” world, working full time, that you begin to realize the mistakes of an earlier you. You try to be responsible and take care of your debts. But, they make it impossible to be successful. They tell you each semester was a different loan. Each loan as a minimum required for payment. If you are unable to pay, they STRAIGHT UP ruin your credit. Now, you are working, paying what you can, and drowning in debt. So, you ignore it.

Ignoring only makes it worse. See these loans were given with the only assurance that you could never escape them. Why? It gave the banks a reason to want to loan you money. They have no reason to loan you money based on merit when you can ignore payments and bankruptcy them away after school. That’s a free education. And, who in this country is in business to give away a free product? No one.

The issue is the original concept looked promising. Now, students are coming out of college, earning bottom pay in their fields, and almost completely broke by student loan debt. The housing market suffers because you cannot get financing. You are forced to live at home or with roommates to survive. Which works for a time. However, to the big number crunchers in the high-powered jobs, that does not look good for business.

Then, there is the threat of the aging baby boomers. Well, if you cannot afford children, you don’t have them. So, our generation is not being pressured to produce children in a world where they cannot be given a comfortable life. Oh, it could be comfortable, we earn enough – we are just in such debt there is no money.  Then, our baby boomer parents are going to need us to help care for them. Well, THERE’S NO MONEY! Perhaps now it is a time to talk about the reality of the student debt con.

Perhaps now it is a time to talk about the reality of the student debt con. No other kind of loan can you raise interest rates as you please and never go away. So, a loan that was $12,000 ten years later is now $60,000 after fees and interests are tacked on. The note is $499 per month, minimum. But, there are ten more demanding payments of a minimum of $50 per one. Now, the subsidized ones can be combined with a single payment matched to your income through their Income Based Payment option (This can be as low a $0 or as high as they believe you are capable of paying).  On an average newly out of college graduate’s salary $40,000 (let’s go on the high side), per month (not taking out for taxes) leaves that person with only $770 approximately per week. Well, there’s rent $800 per month. Sure, there’s cheaper rent – or assisted rent (which keeps the burden on the already squeezed economy, ‘as they say’). Then, there are utilities $100 (be on the cheaper side). What about food? $50 per week. Then, do you need a car to get to your job or can you walk? Another loan. $20,000 with a 6-year payoff and 12% interest because student loans have destroyed your credit. Now your payments are $535 per month. Insurance? Health, dental, eye, life, and car insurance are necessary – $400 there for it all. Sure, if you land a good job, you can get some of that burden on the health side taken care of – BUT, not really. Employers only do what the law says they must; and, most don’t want to do even that. So, they find the cheapest plans to offer for themselves – while jacking up your monthly burden. It is now almost better to go outside of your employers to pay for insurance (for some employers, not all). Now, we have gas and maintenance to add it. Let us say we got an efficient car $150 per month we need to operate our vehicle (that is without emergencies popping up). Oh, then, there is the require to have any good credit, credit card payments. Let us give that $100.  Then, there is the need for a phone. Let us say you went with the cheapest on the market $50 per month.

Where are we at on the monthly debt to income scale?

$3,080 (before taxes) is what we bring in at our $40,000 per year job.
Our Debt is $2335
Student Debt $625 (Let say this is how much your total after all the available options have been utilized).
$2960 is your total debts for the month.
This leaves only $120 per month for things like investing and savings (according to what people would like to advise you to do).

Well, the sad truth is that figure is not accurate. There are other deductions like taxes that come into factor. Now, the student loan lenders would have you reduce your cost. Mmk, let’s reduce our food intake to $20 per week $80 per month. Gives us a break of $2840 per month. Sure, we can eliminate cars, phones, credit cards, or rent on paper. The problem is that’s not accurate for maintaining a career. Your employers do not care how you get to work. Though they do demand you show up. And, let’s say you got that car payment before you knew about your student loans. You can’t destroy your credit just because a student loan is demanding payment.

How long can this continue? For happiness, not too long. It makes you feel like you are worthless. That you only work to pay bills. You can’t have all work and only enjoy being in an empty house with no entertainment. This will lead to becoming angry.

But, hey, it only matters once the people who put this wild business idea into plan actually have to reap what they sowed. It only matters will millions of baby boomers are out of work looking for a country to pay for their end of life retirements – when we borrowed against the money and there is no money available to cover. Hey, it is okay that you made these terrible decisions. After all, you’re going to die right! It is up to us to fix the mess you made, while we struggle to be an adult. And, you think we want children to feed into your greedy backend deals? No thank you.

Hope you enjoy your “non-retirement” baby boomers. We cannot afford you. We are too heavily burdened by debts and life. But, if you would be so kind as to leave us a will or two, perhaps we could come out of this with our sanity.  The debt you willingly allowed us to get ourselves in because you did not bother to save for our college. The debt you encouraged us to get into rather than helping us pay for our books or our classes. You were too selfish to teach us about debt. You wanted us to learn on our own. Well, we learned well. We learned there is no money for you. We learned a piece of paper is worth our souls to be able to work for your companies. We slaved away in school to impress you. We mounted debts to help your numbers look good. We voted you into offices – so you could screw us over in the end. And, now look where we all are.

 

One thought on “The dreaded student loan crisis of today!

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