Remember your college loan? Mine was under $100 a month, pretty affordable even on my paltry salary in 1982. College costs have skyrocketed since 1980, and yet the financial aid formula expects parents to live on $27,000 a year, giving the rest of their income; and just about all their savings, to the college of their child's choice. Of course, the colleges cheerfully suggest loans, and hand out Stafford loans which are currently at 6.80%.
We did some calculations.
If a student takes out a principal amount of $5,000 a year in loans with a 10-year payment period, his monthly repayment will be $292.59 a month.
If he takes out $20,000 a year (which is a necessity at many private colleges which may cost $47,000 a year) his monthy repayment would be $1,170.38. Even in the best case scenario where a student graduates with a degree that's in demand and is making $40,000 a year, his take-home pay would be $2,145. Take away the $1170.38 he's paying for his student loan, and he's trying to live on $974.61 a month. Try paying for rent, food, transportation, and other essentials, boys and girls.
To really make your blood pressure rise, listen to this NPR segment, and read the comments.
The Dark Side of Student Loans http://www.onpointradio.org/shows/2009/02/student-loans/