Thank you for the informative show and for responding to my email :)
My name is Julian. I fall into the category of a poor minority (I’m a product of a black father and a Korean mother) who went to AuburnUniversity in Alabama (which I think was the last university in Alabama to desegregate). My parents were divorced on and off in my childhood (with a final divorce in 1998 I think) and in the end my little brother and I ended up with my mother who became financially bankrupt shortly after the paperwork was signed. The bankruptcy pretty much left us with nothing (not that we had much before). My k-12 education was actually pretty good from what I can remember. I went to public schools in Tuscaloosa, Alabama and graduated in 2001 which was before they “resegregated*” the high schools and middle schools.
My point was that a quality education was a double edged sword for the poor. Federal funding has not kept up with the pace of tuition for a long time (this includes subsidized loans and pell grant etc). My mom couldn’t cosign any of my private student loans because of her bankruptcy on file, which leaves me 67grand in the hole for an engineering degree. While I was in college the private loans had outrageous interest rates (some upwards of 14.99%) but it was either that, or quit school half way. I had a part time job most of the time in college and lived in on campus housing so it wasn’t like I was throwing away money. I didn’t party, didn’t drink or anything. I did buy a car which cost me 4,000 because my geo metro (don’t laugh, 3 cylinders is almost enough most of the time!) died one day on the way home. After the loan consolidation after graduation, my interest rate was bumped down to a more reasonable 7.5%~ish range because by then my moms credit had been repaired. Despite this the damage was done. The absurdly high interest rates had nearly doubled what I initially borrowed to around 47thousand dollars (the rest was subsidized federal loans etc).
Granted I did finish my degree a year late so I suppose you could use the argument that if I were a better/smarter student, then I wouldn’t owe as much. I suppose so. But I wasn’t. I also didn’t drop out either or move to an “easier” degree and start my major over. I’ve had classes where the dropout rate is over 60% (engineering physics 1. I’m dead serious about that drop out rate) In then end I suppose none of that is really an excuse. If I were a better student then I wouldn’t owe as much, but I wasn’t. You could say that I could’ve gotton scholarships etc. I tried, its not as easy as writing an essay and collecting your money. If it were, then as the “underachiever” that I am, then no one would have a problem finding money going to college and the private loan industry wouldn’t quadruple in growth. I tried to co-op but it was during the whole internet market crash. Nobody wanted software engineers.
So now, I graduated in 2006 and have had 6 months of not having to pay anything. My minimum payment is around $589 per month for student loans. I pay $500 dollars to sallie mae every month, along with $240 every month to my federal loan. With what I pay extra it cuts my sallie mae loans down by 8 years. I pay extra a month to try to beat back the interest payments. I know the interest is tax deductible but what most people fail to see is that you don’t realize the full benefit of tax deductions as cash returns. So you might have 2k in deductions, that’s great! Depending on your income (and obviously other things) you can still end up owing the government money. Its not the same as having 2k in cash to spend on food. I pay $500 dollars a month on my credit card that has around $1200 (only because I don’t like the idea of giving the credit card company too much money while trying to build credit). 450 a month goes to rent and utilities (studio apt that includes all of those things here in Montgomery, Al) which in the end leaves me with enough money to eat and buy gas. (yes I know this is a partly self imposed thing but in the end it’ll pay to live a frugally now to make up for past mistakes)
I hear that 1/3rd of college students have to move back home because they can’t afford rent and student loan payments. I have a friend that’s in the masters program at Auburn in education that has around 90k in debt already. I have a pilot friend and his wife who have aver 250K in debt combined. My accountant friend has 18 thousand in loans and his dad paid for most of his tuition. My best friend who didn’t actually go to college, has a house, a new truck, and makes 20k more a year than I do at BfGoodrich at a factory job and has been doing operating in the black the entire time I’ve been going under paying for college. (I understand the argument that he has had a 4 year head start in the job market. College was supposed to make up that difference and I know this is only accounts for a personal slice of the sum of what is collectively going on as a whole)
I consider myself lucky to be able to sustain myself (with a lifetime of debt lol). I know there are others who aren’t. Poor students shouldn’t get gouged like this.
*(They rezoned the middle schools so that there ended up being a black school, a white school, and a mixed school. When I say black school I mean literally 7 white students in the entire school of 500+. With the high schools, they rebuilt one, and built another one, splitting our 6A school into 3 smaller ones. The segregation affect is less severe in this situation)