Take This Loan to Find a Job; Find a Job to Pay for This Loan

A startling recent study shows that 45% of college graduates earn less than $15,000 a year, despite the fact that the rate of tuition growth is now four times the rate of wage growth. Given the United States’ unemployment rate of nearly 10%, even a job with a $15,000 salary is a relative goldmine; in theory, this means that less than half of college graduates are making more than $15,000 a year, with the average salary still surprisingly low at $40,000. As CollegeScholarships.org points out in tandem, the process of lending out and paying back student loans has the makings of a pyramid scheme, benefiting only those seated at the top. The information raises a potent question in the minds of many graduates facing loan repayment: “How can I handle this?”

Unfortunately, in this economy, simply finding a high-paying job to power though until the last bill is paid isn’t a simple option. Luck, connections, and availability play a huge role in finding a job, if not an even larger role than education itself, as the former President demonstrated. On the other hand, there are a few features of student loan debt repayment that work to the advantage of the individual.

Service

Anyone who joins the Peace Corps is usually eligible, depending on the lending institution, to defer payment of his or her debt until service is over; as the conclusion of service typically means the receipt of a stipend, some or all of the money could be applied to student loan debt. After a few years of service, a substantial amount of loan debt and interest could be paid off. Certain stipulations apply and it’s not a job for the faint of heart, but it’s an enriching experience to help others around the world that future prospective employers will find impressive.

Payment Options

All debts are bound by law to offer fair repayment options to the individual; in the event that payments become unmanageable as the hunt for a job lengthens, there are always options. Sallie Mae, for example, offers multiple repayment plans, the lowest of which allows the graduate to make income-based payments. In the event of no income, the borrower can claim economic hardship and pay a fee lower than the monthly payment to have the loans put on hold (also called a forbearance). Medical expenses incurred by certain illnesses may also grant the individual a break. Subject to the institution and type of loans, some debts are eligible for cancellation via volunteer work. Google is a portal to a wealth of information; simply searching the lender’s name and “student loans” will bring up information, discussions around the web, and many tactics to making the brick work of laying the pyramid just a bit easier.

Fight for Fairness

As the above CollegeScholarship.org link points out, student loans have been stripped of their consumer protections.  Someone who defaults on their home mortgage has more privileges than a student whose entry level job doesn’t pay enough to make loan payments.  The scales always seem to tip in the direction of the lender, spinning “a $37,000 loan into a $100,000 repayment.”  Protesting for restoration of rights and for fair interest is another option.  As history has always demonstrated in the fight for rights, non-violent protest is an exceedingly efficient way to bring about change for the individual.  For more information on protesting loan repayment, ask Google (and ask specifically).

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